CHARLOTTE -- A new report says Duke Energy could have to pay billions of dollars to fix a damaged nuclear plant in Florida, which was a sticking point in its recent merger.
When Duke Energy announced plans to merge with Progress Energy, executives were eager to expand their nuclear fleet, including the Crystal River Plant north of Tampa. But UNC Charlotte economist Peter Schwarz says things didn't turn out as planned.
“Now what looked like an asset starts to look like a liability,” he said.
The plant has been closed since 2009, when Progress Energy discovered problems inside the reactor's containment building.
“Progress Energy came in to do the repair and it was an unsuccessful repair in that they caused a large crack in the concrete," said Schwarz.
Since the merger closed in July, Duke executives must decide whether to keep the plant shuttered or repair it. Now, a review of the project conducted by a Charlotte engineering firm has the repair costing up to $3.4 billion.
"It's like buying a piece of contaminated property. You don't really know what's there until you start digging up the Earth and see what's there," Schwarz said.
Duke Energy declined to comment on the report.
Crystal River's troubles were at the center of the leadership shakeup in which Duke directors fired former Progress CEO Bill Johnson minutes after the deal closed.
"There's no evidence that Progress Energy suggested the extent of the troubles of this plant," Schwarz said.
North Carolina regulators held three days of hearings this summer focused on Johnson's firing. Schwarz says Crystal River's future could impact any settlement.
"There's just no way to tell what it's going to take to fix a nuclear plant with chronic problems," he said.
A spokesman for the North Carolina Utilities Commission says talks with Duke Energy about a settlement are still underway. The commission hired outside attorneys who are reviewing thousands of pages of documents related to the merger.