Duke Energy on Thursday said it had awarded a $540 million contract for expedited decommissioning of its retired Crystal River nuclear power plant in Florida.
The Charlotte, N.C.-based power company now anticipates decontamination, disassembly, and teardown operations will wrap up by 2027, decades earlier than the prior projected end date of 2074.
Pending state and federal regulatory approval, Accelerated Decommissioning Partners (ADP) would become the licensed operator of the single-reactor facility in Citrus County in western Florida. It would also take ownership of the used fuel storage pad at Crystal River.
Duke would remain the Nuclear Regulatory Commission-licensed owner of the facility, which is part of a broader energy generation operation that encompasses four coal-fired units and a combined-cycle plant with two power blocks.
The announcement represents Accelerated Decommissioning Partners’ first contract win since its formation in February 2017. The company is a joint venture of demolition specialist NorthStar Group Services and Orano USA, the domestic branch of French nuclear company Orano (formerly AREVA).
“It is a really good project for ADP to take as a first project. The owner, Duke, is longtime customer of both NorthStar and Orano. There’s a very strong relationship and trust and understanding of how we work together,” Accelerated Decommissioning Partners CEO Scott State told RadWaste Monitor.
State is also CEO at New York City-based NorthStar, which separately secured a deal with Duke for decommissioning two shuttered coal units at the Crystal River Energy Complex.
The Crystal River plant began operations in 1977. Duke permanently retired the pressurized-water reactor in 2013 rather than trying to fix its damaged containment building. It placed the reactor into SAFSTOR mode in 2015, under which final decommissioning could be delayed for up to six decades. The estimated cost for that approach was $895.9 million, and the company acknowledged earlier this year it was considering options to speed up that process.
That rethinking actually dates to 2017, Terry Hobbs, Duke’s general manager for nuclear decommissioning, said during a telephone interview with State. By that point, Duke had shut down most of the plant’s systems, largely built its dry-cask spent fuel storage pad, and was starting the actual fuel transfer. That put Crystal River on a “glide path” to true dormancy by this summer, he said.
Meanwhile, management was monitoring the state of decommissioning in the industry, where the focus was on accelerated cleanup of power plants. New York-based NorthStar had already applied to assume the NRC license for the Vermont Yankee nuclear power plant following its closure in 2014. The license transfer was a mandatory step in NorthStar’s plan to buy the facility from owner Entergy for decommissioning, a deal completed in January of this year.
“We thought we should go and take a fresh look at the decommissioning here in the U.S., the companies, the technologies, what’s really available, and that’s what led us down the path” to signing the contract with ADP on Wednesday, Hobbs said.
Duke issued a request for information from a large number of potential bidders in November 2017, then in May 2018 asked for bids after meetings with select vendors. Four vendors submitted proposals last July, after which Duke narrowed the field to two teams for site visits and additional vetting through the end of 2018. Negotiations with Accelerated Decommissioning Partners began in January.
State acknowledged that ADP had initially aimed for a deal in line with the business model NorthStar established in the Vermont Yankee deal – paying a nominal amount to buy the plant, accepting all responsibility for decommissioning, site restoration, and spent fuel management. That came with the decommissioning trust, some of which would potentially convert to profit when work is complete.
That method proved impossible at Crystal River, partly because the nuclear facility is just one component of a 5,100-acre Duke-owned energy complex. There were also complexities in the decommissioning trust itself. That led to the deal in its current format.
“One of the complexities included the tax treatment of the asset acquisition model versus the contract we negotiated. Plus, we wanted to continue to own and manage the trust fund,” Duke spokeswoman Heather Danenhower said by email Friday.
The contract will be paid out of the decommissioning trust, which held $717 million as of March 31 of this year. Most leftover money when decommissioning is complete will be returned to Duke ratepayers, who also will not suffer increased electricity bills to pay for the project, Duke pledged.
The Orano-NorthStar venture was selected based on its experience and the strength of its proposal, Duke spokeswoman Heather Danenhower said Thursday. Combined, the companies have decommissioned 10 nuclear power plants.
Under its former AREVA name, Orano also managed the offload of used fuel at Crystal River from wet to dry storage. That program wrapped up in January 2018.
“From a competitive bid process, clearly they were very competitive, and then their bid remained very consistent throughout the process,” Hobbs said. “That gave Duke Energy pretty high confidence.”
The $540 million contract is a fixed-price award, which does not cover management of the spent fuel pad that ADP will own, according to a Duke Energy 8-K filing with the U.S. Securities and Exchange Commission.
Duke declined to identify the other bidders. Two of the major players in the domestic nuclear decommissioning market, EnergySolutions and Holtec International, did not say this week whether they had bid.
Accelerated Decommissioning Partners and Duke plan to file the license transfer application with the Nuclear Regulatory Commission in June. The agency would then conduct a detailed technical review of the request.
Decommissioning is slated to begin in 2020. Planning and engineering would stretch into 2021, followed by removal of the reactor vessel and other contaminated and noncontaminated equipment through 2025. With authorization from the NRC, demolition would be conducted in 2026-2027.
State said ADP is in talks for other decommissioning projects, though he declined to discuss specifics. He said the company would eye a broad swath of opportunities, from plants that have been closed for some time to facilities that are newly retired or soon to end operations. Some deals could be along the lines of the Crystal River approach, others involving full license and ownership transfer.
