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Progress Energy Signs Reactor Deal

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By RUSSELL RAY

rray@tampatrib.com

Published: January 6, 2009

TAMPA - Progress Energy Florida said Monday that it has signed a contract to build two nuclear reactors on a 5,100-acre site in Levy County.

Jeff Lyash, president and chief executive of the St. Petersburg-based utility, called it a major step in Florida's effort to reduce greenhouse gas emissions.

"Expanding our nuclear capacity will ensure our customers will continue to have a reliable supply of energy, while reducing reliance on fossil fuels and helping to eliminate greenhouse gas from our environment," Lyash said in a statement.

The deal with Westinghouse Electric Co. and The Shaw Group Inc. includes the purchase of two 1,105-megawatt reactors. Together, the reactors could generate power for more than 1.3 million Florida homes.

The first reactor would begin generating power in 2016. The second unit would be up and running in 2018. The cost: $17 billion.

The utility began recovering a portion of the cost from customers this month, adding $11.42 to the cost of 1,000 kilowatt hours.

Two local lawmakers, state Sen. Mike Fasano of New Port Richey and state Rep. Peter Nehr of Tarpon Springs, have asked Progress Energy to suspend its plan to recover the cost of the project early. The added cost, they said, would increase the financial burden of consumers who are struggling to pay bills in tough economic times.

Both lawmakers have pledged to introduce legislation that would prevent the utility from recovering the cost of the project in advance.

Progress Energy said most of the project's cost will be recovered from customers after the reactors are in service.

The next step for Progress Energy: finalizing a deal for joint ownership of the two-reactor project.

Progress Energy and Tampa Electric have talked about entering such a partnership. TECO said it has talked to Progress and other energy companies about a deal that would give it partial ownership of a nuclear reactor or a share of the power.

Under executive orders signed by Gov. Charlie Crist in 2007, carbon dioxide emissions from power plants must be reduced to 1990 levels by 2025.

Progress Energy's nuclear project won unanimous approval from the Florida Public Service Commission in July. But the plan also requires approval from the Nuclear Regulatory Commission and the Florida Department of Environmental Protection.

The DEP is expected to issue a decision this year. The NRC review is expected to take three to four years.

Reporter Russell Ray can be reached at (813) 259-7870.

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