Duke Energy can spend $120mn on nuclear power plant

The North Carolina Utilities Commission ruled August 5 that Duke Energy (NYSE: DUK) can spend up to $120 million to maintain the planned $11 billion, 2,234 MW Lee Nuclear Station in South Carolina.

News reports said the commission will examine all expenditures for prudence and reasonableness. The utility must file a report Sept. 1 detailing amounts spent between Jan. 1, 2011 and June 30. It then must file reports every six months beginning Feb. 1, 2012 until the commission changes its order.

The ruling also reportedly voiced concern over the effect of nuclear plant failures in Japan after the March 11 earthquake and tsunami.

Duke Energy CEO James Rogers reportedly said at a commission hearing that the Charlotte-based utility wanted to spend up to $459 million in development costs. The company has already been allowed to spend $172 million. It requested in March to invest an additional $287 million in development costs through 2013 when Duke Energy hopes to receive a federal construction license for the plant.

In May, Duke Energy filed an amended application saying it agreed with the commission staff’s opinion that it should be allowed to spend up to $120 million from Jan. 1, 2011 through June 30, 2012. The commission’s current ruling did not set a time limit for when Duke had to spend the money.

The commission is reportedly allowing Duke to maintain the project. Duke will have to go before the commission again if it wants to spend more. Duke Energy also cannot recover any of the $120 million from ratepayers, the commission said.

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