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.

Duke in hearing on nuclear costs

Amid the aftershocks of the Fukushima-Daiichi crisis, Duke Energy is seeking the S.C. Public Service Commission's blessing today to spend more money on its next nuclear plant.

Duke took much of the drama out of the day by agreeing to whittle back the additional $229 million in additional pre-construction costs it first sought. That would have put the total spent on the Lee plant, which Duke hasn't yet decided to build, at $459 million through 2013.

Instead Duke agreed with consumer and environmental groups to limit spending to "only the absolute minimum amount of dollars necessary to keep the nuclear option available" -- $120 million from this January through June 2012. That would keep the $11 billion Lee on track to start up sometime between 2021 and 2023, a date that's been pushed back a couple of times.

Duke has agreed to similar terms with North Carolina's consumer advocates on a Lee spending proposal before the N.C. Utilities Commission. That commission hasn't yet ruled.

Approval by the states would give Duke reassurance that it can eventually recover Lee's costs from customers, although that would take separate OKs.

Duke also commits in the S.C. agreement to continuing to try to share the risks of building a new plant. It pledges to keep negotiating for an interest in the two reactors that Santee Cooper and SCANA are preparing to build in Jenkinsville, S.C.

Friends of the Earth nuclear activist Tom Clements, the only party to the case that didn't sign the agreement, was scheduled to question Duke CEO Jim Rogers and other executives today.