The Cherokee County, S.C., site of Duke Energy’s proposed Lee nuclear power plant, in 2006. Duke had begun construction of a nuclear plant in the 1970's but later canceled the project. File photo from WCNC's AirStar6
The Cherokee County, S.C., site of Duke Energy’s proposed Lee nuclear power plant, in 2006. Duke had begun construction of a nuclear plant in the 1970's but later canceled the project. File photo from WCNC's AirStar6

Business

Duke Energy wins license for S.C. nuclear plant it may never build

December 21, 2016 12:46 PM

UPDATED December 22, 2016 08:00 AM

The Nuclear Regulatory Commission has awarded Duke Energy licenses to build two nuclear power reactors near Gaffney, S.C., although Duke might never build them.

The combined licenses allow Duke to build and operate two AP1000 reactors, a project first announced in 2006. Duke applied for the licenses for the William States Lee plant in 2007 but says it is undecided whether to go forward with the $11 billion plant.

“Duke Energy continues to regard new nuclear as a viable option for future generation and understands the importance of fuel diversity in creating a sustainable energy future,” spokeswoman Rita Sipe said.

“We evaluate new generation based on, among other factors, energy needs, project costs, carbon regulation, natural gas prices, and existing or future legislative provisions for cost recovery. The ultimate decision and timing of Lee will be based on what is in the best interest of our customers and will be founded on the best information available at the time we make the decision.”

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Duke first estimated a 2016 operating date for Lee when it proposed the plant a decade ago, but has steadily pushed that date forward. In a July filing, the company said it has spent nearly $495 million in preconstruction costs since 2011.

Duke’s decision on whether to build Lee comes as growth in demand for electricity has stagnated. The industry is also closely watching the costs of two new nuclear plants under construction in South Carolina and Georgia.

In a planning document filed with state regulators in September, Duke said new nuclear capacity could be needed as early as the mid-2020s. Duke Energy Carolinas, the utility that serves the western Carolinas, projected a 33 percent increase in nuclear energy by 2031.

But the Lee decision is further complicated by several factors: Whether prices for a competing fuel, natural gas, stay low; the impact of environmental regulations such as President Obama’s carbon-cutting plan, now on hold; and whether federal regulators will let Duke extend the operating licenses of its current nuclear fleet.

Duke canceled the engineering, procurement and construction contract for a new nuclear plant in Levy County, Fla., in 2013, following its merger with Raleigh-based Progress Energy. The NRC awarded Duke a license to build the plant in October.

The NRC attached conditions to the Lee licenses, involving emergency preparedness plans and response, in the wake of the nuclear disaster after a tidal wave smashed Fukushima, Japan, in 2011.

A NRC review of the Lee plant’s safety was completed in 2015, and an environmental review was issued in 2013. The NRC certified the 1,100-megawatt Westinghouse AP1000 reactor design in 2011.

500 power trucks roll out to help restore power after Hurricane Matthew

About 500 power trucks from contracted by Duke Energy roll out of the Coastal Credit Union Music Park at Walnut Creek Monday, October 10, 2016 in Raleigh, N.C. to help restore power in central and eastern North Carolina following Hurricane Matthew. (No Audio)

Jill Knight jhknight@newsobserver.com

Bruce Henderson: 704-358-5051, @bhender