Florida PSC Approves Crystal River 3 Cost Recovery Settlement

Florida PSC Approves Crystal River 3 Cost Recovery Settlement

The Florida Public Service Commission approved a settlement of all costs related to the retirement of the Crystal River 3 nuclear power plant in Florida.
 
The securitization financing order would allow plant owner Duke Energy Florida (NYSE: DUK) to issue approximately $1.3 billion in bonds to cover retirement costs and, ultimately, lower customer bills. Commissioners are expected to review and decide on a final financing order in November. Duke estimated that by lowering interest costs, the order would decrease the 20-year overall customer cost by about $600 million. The utility expects to offer the Nuclear Asset Recovery Bonds to investors via a public offering registered with the Securities and Exchange Commission.
 
The Florida Legislature passed a law in 2015 allowing Duke to securitize its asset recovery. Duke filed its plan with the PSC July 27 to assess customer fees for up to 20 years and sell them to a “special purpose entity” that will use them as collateral for the bonds. All existing and future customers receiving transmission or distribution services from Duke Energy Florida will pay the nuclear asset recovery charge, which will be used to recover the amount of the Crystal River 3 asset.
 
In 2013, Duke announced it would close the plant when repairs to the concrete containment building would have cost as much as $3.4 billion, in addition to replacement power costs.
 
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