It was announced today that Progress Energy Florida has signed a contract with Westinghouse Electric Company LLC and The Shaw Group Inc.’s Power Group for the engineering, procurement and construction of two nuclear units for a proposed nuclear power plant in Levy County, Florida.

The contract provides equipment, engineering and construction services for two 1,105-net megawatt (MWe) AP1000(TM) reactors and is the next step in ensuring that the option of nuclear power remains viable for the people of Florida.

Bill Johnson, chairman, president and CEO of Progress Energy, Inc. (NYSE:PGN) said “Along with energy efficiency and alternative energy, advanced, carbon-free nuclear power is an important part of the balanced solution we use to meet the needs of homes and businesses that depend on us. As we work to address the effects of global climate change, emission-free nuclear energy is the best large-scale means for making a positive difference.”

The company will retire the two oldest coal-fired units at the Crystal River Energy Complex in Citrus County after the new, advanced-design nuclear units are built in Levy County. This will reduce the company’s carbon dioxide (CO2) emissions by more than 5 million tons per year, which is the equivalent of removing more than 830,000 vehicles from Florida’s roads, or meeting nearly 60 percent of the company’s responsibility toward achieving Florida Governor Charlie Crist’s 2025 emission-reduction target.

The company is also aggressively pursuing energy efficiency, investing in renewable-energy resources and developing advanced transportation technologies, such as plug-in hybrid electric vehicles, to help reduce
greenhouse gas emissions.

Florida is the fourth-largest state and ranks third nationally in per-capita energy consumption. Compared to 30 years ago, the average new home today is 50 percent larger and uses 30 percent more electricity. Since the Crystal River nuclear plant came online in the mid-1970s, the company’s customer base has more than doubled.

The cost of the two new nuclear units is based on a contract price of $7.65 billion, plus forecasted inflation, owner costs and contingencies. The company estimates the total cost for the two generating units to be
approximately $14 billion. This estimate includes land price, plant components, financing costs, construction, labor, regulatory fees and reactor fuel for two units. An additional $3 billion is estimated for the necessary transmission equipment and about 200 miles of transmission lines associated with the project. The final cost of the project will depend on the completion dates, which will be determined in large part by the NRC review schedule. The majority of the project’s costs will be invested by the company and
its shareholders and will not be recovered from customers through rates until the plant goes in service.

However, starting this month, customers will begin paying for a portion of the costs of the project as approved by the PSC. This cost-recovery provision will ultimately save customers approximately $13 billion over the life of the plant by paying for the initial stages of infrastructure improvement and the interest on the loans to build the units as costs are incurred, rather than letting these costs accrue and escalate until
the units are in service.

Floridians are estimated to benefit by up to $1 billion per year in estimated fuel cost savings once the units are in operation. Building the new plant will generate employment for at least 3,000 people at the peak of construction. Once the units are in operation, they will employ a minimum of 800 full-time, high-wage positions that Governor Crist calls “green jobs,” as well as an additional 1,200 indirect jobs. The positive
economic impact of a two-unit nuclear site to the state and local communities is estimated to be hundreds of millions of dollars annually over the planned 60-year plant life.

Progress Energy Florida also leads the state’s utilities in using cost-effective, renewable-energy sources within the state. The company continually seeks cleaner, newer ways to produce energy for its customers.

Today, Progress Energy Florida’s alternative and renewable projects include multiple biomass projects, several solar photovoltaic initiatives, residential solar thermal water heating and hydrogen fuel cell technology.

For more information about Progress Energy, visit the company’s Web site at http://www.progress-energy.com

via Progress Energy Florida

image: Enrico Fermi Nuclear Power Plant Lake Erie