GRU chief says no to Levy nuclear plant deal

Sept. 30, 2008

By MEGAN ROLLAND - Sun Staff Writer

Gainesville Regional Utilities has elected not to partner in the proposed construction of two nuclear reactors in Levy County.

"To continue from this point forward would require us to commit to some significant liabilities, and there are a number of reasons why it would not be prudent to do so at this time," wrote Bob Hunzinger, general manager of GRU, in a letter to the Gainesville City Commission.

Progress Energy has proposed the nuclear power plant as a way to meet the growing demand for energy by the year 2016.

Application for construction of the units was submitted with the Nuclear Regulatory Commission in July, and Rick Kimble, manager of nuclear communication for Progress Energy, said it will take about three years for the federal agency to respond to the application.

Kimble said that in a large undertaking - like the $17 billion nuclear plant - it is imperative to have all the partners and investors committed to the project early.

"It's also a lot of money involved, so any types of partnerships would have to be lined up about now," Kimble said.

He declined to say if any other utilities had committed to the project but said Progress Energy was in negotiations with other utilities and would make an announcement soon if there are other partners.

Kimble said that GRU's decision not to participate in the plant will not affect the project.

"It was a fairly small percentage of the total project and probably would not have any significant impact," he said.

Hunzinger said in his letter that the financial obligation for the project would begin accruing immediately and would force GRU to raise rates for users more than the increases that took affect this month.

Progress Energy has proposed raising their electricity rates by 31 percent this year or about $34 for every 1,000 kilowatt-hours.

Of that increase about $11.42 is earmarked for new nuclear-plant construction.

Hunzinger said that the Levy County project was a risk because of untested legislation that allows a company to apply for both permits to build and operate the plant simultaneously.

"This has not yet been tested in court," Hunzinger wrote. "As one of the first applicants under the new legislation the Progress Energy project is exposed to this contingency, which has major cost implications."