North Carolina utilities monitoring Japan nuclear crisis

Mar 15 - McClatchy-Tribune Regional News - Richard Craver Winston-Salem Journal, N.C.

The nuclear reactor crisis in Japan has captured the attention of North Carolina's largest energy companies.

However, officials with Duke Energy Corp. and Progress Energy Inc. said Monday that the crisis is not dampening their commitment for building a nuclear power plant in the Carolinas.

In fact, Duke Energy Carolinas LLC will appear before the N.C. Utilities Commission at 9 a.m. today to request approval to proceed with taking on the project-development costs of a potential $11 billion nuclear plant in Cherokee County, S.C.

Progress Energy has plans for a plant with two reactor units at sites near Raleigh and Levy County, Fla., about 1 { hours north of Tampa. The Levy County plant could cost between $17.2 billion and $22.5 billion, Progress spokeswoman Jessica Lambert said.

The companies are seeking regulatory approval for Duke's $13.7 billion purchase of Progress, which would form the nation's largest electric utility. They say the merger would better equip it to retire obsolete plants, build new ones and meet demands for cleaner energy.

"We owe it to our customers to provide them with lower-cost electricity through new nuclear power plants," said Jason Walls, a spokesman for Duke. "Our customers have some of the lowest costs in the nation because of nuclear energy."

The three Duke nuclear power plants in the Carolinas -- built between 1973 and 1985 -- provide about half of the electricity used by its customers there, as well as about 26 percent in its territory.

Progress has four nuclear power-generating stations that are each about 30 years old -- two in North Carolina and one each in Florida and South Carolina. They supply about 35 percent of the electricity used by its customers.

As employees at the Fukushima Dai-ichi plant work frantically to avoid a meltdown, the crisis appears to be slowing the momentum that nuclear energy had been building with consumers and within Congress in recent years.

The timing is tough for the industry, which recently has been enjoying more support in Washington than on Wall Street.

President Barack Obama, as well as Republican leaders on Capitol Hill, want to lend the industry billions of dollars in additional taxpayer money to help pay for building plants. Even some environmentalists had begun to embrace nuclear energy in the wake of last summer's Gulf of Mexico oil spill and amid concerns about global warming.

But banks and investors worry that the plants are too expensive and risky to finance.

"The nuclear renaissance in the U.S. was on the rocks in any case," said Peter Bradford, a former commissioner of the U.S. Nuclear Regulatory Commission. "There's no way this is a positive for a technology that's dependent entirely on political support."

Some U.S. senators, including Joe Lieberman, I-Conn., have said it may be wise to extend the moratorium on new plants until the extent of the Japanese crisis is learned.

The two Progress units at the Brunswick plant in Southport have a General Electric Co. Mark 1 boiling-water reactor that is similar to the one in Japan, and anti-nuclear activists have said it has an unsafe design. Lambert said that the Brunswick units have upgrades that include a different cooling system.

Sen. Richard Burr, R-N.C., said that the events in Japan "are a reminder that safety must remain a key component in nuclear power plant operations."

"But we should avoid impulsive calls to remove reliable energy sources from production."

Sen. Kay Hagan, D-N.C., said that the country "must continue to become more energy independent, and I support investments in clean energy as a part of a comprehensive energy strategy."

The process of building a nuclear power plant is long, with many regulatory hurdles to clear.

For example, in the case of the proposed 2,234-megawatt, two-unit plant near Gaffney, S.C., Duke began its request for a construction and operating license application in December 2007. The goal is to have the plant operational by 2020.

Walls said that the company's request before the state Utilities Commission would not affect customer rates at this time. The cost of building the plant is expected to be passed on to consumers at some point, Walls said, but he added that consumers would benefit in the long run from lower rates.

At least 13 organizations, including AARP North Carolina, the N.C. Justice Center and the N.C. League of Conservation Voters, have formed Consumers Against Rate Hikes to protest the potential pass-on costs of the S.C. plant.

Duke and Progress officials said the companies take into consideration the geographic and geological nature of each of its sites in determining the worst-case scenarios before construction.

The Brunswick plant was built to withstand hurricanes, tornadoes, earthquakes, tsunamis and storm surge among natural threats, Lambert said.

Walls said that the standard for Duke's plants in the Carolinas is the 1886 earthquake in Charleston, S.C., that was estimated to have been between magnitude 6.6 and 7.3.

rcraver@wsjournal.com

(336) 727-7376

The Washington Post contributed to this report.