Progress Energy 2010 Annual Report Download - page 45

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Progress Energy Annual Report 2010
Mayo and Asheville coal-fired plants in North Carolina,
which have state-of-the-art emission controls. Emissions
of NOx, sulfur dioxide (SO2), mercury and other pollutants
have been reduced significantly at these sites.
In฀recent฀years,฀the฀federal฀government฀has฀authorized฀
loan guarantee programs for innovative energy projects
as well as newly constructed nuclear facilities. PEF
decided not to pursue the loan guarantee program for the
Levy project. However, this decision does not preclude
PEF from revisiting the program at a later date if there are
changes to the program. We cannot predict if PEF will
pursue this program further.
Nuclear
Nuclear generating units are regulated by the NRC. In
the event of noncompliance, the NRC has the authority
to impose fines, set license conditions, shut down a
nuclear unit or take some combination of these actions,
depending upon its assessment of the severity of the
situation, until compliance is achieved. Our nuclear units
are periodically removed from service to accommodate
normal refueling and maintenance outages, repairs,
uprates and certain other modifications.
In September 2009, CR3 began an outage for normal
refueling and maintenance, as well as its uprate project
to increase its generating capacity and to replace two
steam generators. During preparations to replace the
steam generators, we discovered a delamination within
the concrete of the outer wall of the containment structure,
which has resulted in an extension of the outage.
After a comprehensive analysis, we have determined
that the concrete delamination at CR3 was caused by
redistribution of stresses on the containment wall that
occurred when we created an opening to accommodate
the replacement of the unit’s steam generators. We
expect to complete repairs in March, and return the unit
to service following successful completion of post-repair
testing and start-up activities in April 2011. Nuclear safety
remains our top priority, and our plans and actions will
continue to reflect that commitment. A number of factors
affect the return to service date, including regulatory
reviews by the NRC and other agencies, emergent work,
final engineering designs, testing, weather and other
developments (See Note 7C).
PEC’s nuclear units have operating licenses granted by the
NRC that have been extended to 2030 and 2046. The NRC
operating license held by PEF for CR3 currently expires
in December 2016. On March 9, 2009, the NRC docketed,
or accepted for review, PEF’s application for a 20-year
renewal on the operating license for CR3, which would
extend the operating license through 2036, if approved.
Docketing the application does not preclude additional
requests for information as the review proceeds, nor
does it indicate whether the NRC will renew the license.
The license renewal application for CR3 is currently under
review by the NRC with a decision expected in 2011.
POTENTIAL NEW CONSTRUCTION
While we have not made a final determination on nuclear
construction, we continue to take steps to keep open the
option of building a plant or plants. During 2008, PEC and
PEF filed COL applications to potentially construct new
nuclear plants in North Carolina and Florida. The NRC
estimates that it will take approximately three to four
years to review and process the COL applications. We
have focused on the potential nuclear plant construction
in Florida given the need for more fuel diversity in Florida
and anticipated federal and state policies to reduce GHG
emissions as well as existing state legislative policy that
is supportive of nuclear projects.
In 2006, we announced that PEF selected Levy to evaluate
for possible future nuclear expansion. We selected
the Westinghouse Electric AP1000 reactor design as
the technology upon which to base PEF’s application
submission. In 2007, PEF completed the purchase of
approximately 5,000 acres for Levy and associated
transmission needs. On July 30, 2008, PEF filed its COL
application with the NRC for two reactors. PEF also
completed฀and฀ submitted฀a฀ Limited฀Work฀Authorization฀
request for Levy concurrent with the COL application.
The FPSC issued the final order granting PEF’s petition for
the Determination of Need for Levy on August 12, 2008.
On October 6, 2008, the NRC docketed the Levy nuclear
project application. On February 24, 2009, PEF received
the NRC’s schedule for review and approval of the COL.
PEF’s initial schedule anticipated performing certain
site฀ work฀ pursuant฀ to฀ the฀ Limited฀ Work฀ Authorization฀
prior to COL receipt. However, in 2009, the NRC Staff
determined that certain schedule-critical work that PEF
had proposed to perform within the scope of the Limited
Work฀Authorization฀will฀not฀be฀authorized฀until฀the฀NRC฀
issues the COL. Consequently, excavation and foundation
preparation work will be shifted until after COL issuance.
This factor alone resulted in a minimum 20-month schedule
shift later than the originally anticipated timeframe. Since
then, regulatory and economic conditions have changed,
resulting in additional schedule shifts. These conditions
include the permitting and licensing process, national
and state economic conditions, recent FPSC DSM