Progress rate hike OK'd to cover nuclear replacement power costs

The Florida Public Service Commission Feb. 22 unanimously approved an agreement that will increase the power bills of Progress Energy Florida (NYSE: PGN) customers.

According to the Tampa Bay Times, the deal includes a $288 million so-called refund to customers who were paying to replace power lost from the 860 MW Crystal River nuclear power plant. The plant has been closed since 2009 after cracks were found in the concrete containment wall during a maintenance and upgrade outage.

The average customer’s bill is reportedly expected to increase $4.93 per 1,000 kWh per month.

Progress Energy said it did not think its insurer would “voluntarily pay” the full cost of repairing the Crystal River plant, a decision that could delay the reactor’s restart and cost tens of millions of dollars in additional replacement power. The company had said the plant would be back online by 2014, but the Nuclear Electric Insurance Limited had stopped paying claims in the first half of 2011 and still has not decided whether to cover the rest, the article said.

If the utility decides to repair the plant, it must begin the work before the end of 2012, according to a settlement agreement between Progress and the Office of Public Counsel, the article said. If Progress does not meet that deadline, the company would add $100 million to the $288 million to be refunded to customers.

Part of the agreement also limits the amount Progress can collect in advance for the planned $22.5 billion Levy County nuclear power plant.

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