Friday, June 24, 2011

Duke gets S.C. approval for nuclear spending

South Carolina's Public Service Commission this week approved Duke Energy's decision to spend up to $120 million more on pre-construction costs of the Lee nuclear plant.

The $11 billion plant, Duke's first in a generation, would go up near Gaffney, S.C., southwest of Charlotte. The S.C. approval covers spending from January of this year through June 2012 to "keep the nuclear option available."

That language reflects the uncertainty surrounding the delayed nuclear renaissance, which has been battered by high costs, cautious investors and, more recently, the nuclear crisis in Japan. The Nuclear Regulatory Commission last month said it has delayed approval of the reactor design Duke plans to use, the Westinghouse AP1000, because of unresolved technical issues.

North Carolina's Utility Commission hasn't yet ruled on a similar request on pre-construction spending by Duke. Duke had initially sought an endorsement of its decision to spend up to $287 million on Lee through 2013, for a total of $455 million including previous spending. Duke agreed with consumer advocates to limit the amount of further spending to $120 million through mid-2012.

Duke, meanwhile, continues to seek partners to share the costs and risks of new plants. In February, Jacksonville, Fla.'s municipal electric utility took an option to buy up to 20 percent of Lee. Duke has also shown interest in buying a portion of the two-reactor expansion of the Summer plant near Columbia that is co-owned by Santee Cooper and Scana Corp.

After twice pushing back the startup date for Lee, Duke now says it will be in about 2021.