Duke Energy 2012 Annual Report Download - page 10

Resolving near-term issues
Since mid-2012, our senior management has
been focused on five near-term priority issues.
We’re successfully working through these complex
challenges. Below is a brief summary of where we
stand. You’ll find more information in the attached
10-K annual report and on our website.
Crystal River 3
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This 860-megawatt nuclear
plant in Florida, which began operating in 197 7,
has been safely shut down and off line since
late 2009 because of the reactor’s damaged
containment structure. In February 2013, after
extensive analysis, we decided to retire the plant
rather than attempt a repair with too much risk.
This decision, although difficult, is the right plan for
our customers in Florida, our shareholders and our
company. We are evaluating the potential to build a
new natural gas-fueled power plant in Florida.
Nuclear performance
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Achieving excellence
consistently across the nuclear fleet is an ongoing
high priority. In 2012, the combined nuclear
capacity factor, excluding Crystal River, was 90.4
percent. This was the 14th consecutive year
that Duke Energy nuclear plants have topped 90
percent – an outstanding record.
We are adopting best practices across our 11
operating nuclear reactors, taking advantage of
their geographic proximity in the Carolinas. The
merger has created opportunities to make targeted
investments to achieve greater reliability, efficiency
and scale benefits.
Edwardsport project
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Our 618-megawatt
Edwardsport coal-gasification power plant in
Indiana has been a challenging but important
construction project. This advanced, cleaner-
coal plant is now fully constructed and in the
final stages of testing and startup. We expect
it to be in commercial operation by mid-2013.
In late 2012, Indiana regulators approved, with
some modifications, a settlement agreement that
caps the construction costs that Indiana retail
customers will pay at $2.595 billion. Edwardsport
will help us meet stricter environmental
regulations while using local Indiana coal, an
abundant resource.
Rate cases
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Another priority is to achieve
constructive outcomes in our various rate case
proceedings. Although no one likes to pay more
for anything, we need to recover the billions
of dollars in approved capital investments we
have made to upgrade the power system for our
customers and comply with new environmental
rules. In 2013 we have rate cases in North
Carolina and South Carolina, as well as electric
and gas distribution rate cases in Ohio. We will
continue to offer competitive rates – in some
cases, well below the national average.
Merger efficiencies
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We are aggressively
controlling our own costs by integrating our
post-merger organizations, consolidating systems
and adopting best practices. As mentioned, we
are on track to deliver $687 million of savings
to our Carolinas’ customers in the first five years
after the merger. We’re also on track to achieve
approximately 5 to 7 percent savings in non-fuel
operating and maintenance costs.
Duke Energy Corporation 2012 Annual Report
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