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Taxpayers Steaming Over Florida Nuclear Plant's Shuttering

Feb 14, 2013
Originally published on February 14, 2013 7:15 pm

The operator of Florida's Crystal River nuclear plant sent shockwaves through the state when it announced recently that it was shutting down the facility for good.

When nuclear plants have closed elsewhere, locals have cheered. But in Citrus County, it's been more like a death in the family.

At Fat Boy's Bar-B-Q restaurant in Crystal River, owner Bubba Keller says he's worried about what's going to happen to the community. "I mean, things are already tough," Keller says. "If this makes it worse, don't know if I can hang in there."

Keller's restaurant has been serving beef, pork ribs and chicken here for more than 40 years. When the Crystal River plant was operating, Fat Boy's Bar-B-Q could depend on regular takeout orders from the several hundred people who worked there.

But those days are gone. The plant shut down for maintenance in 2009 and last week, Duke Energy announced it would not reopen.

An Economic Engine, Shut Down For Good

Citrus County is a largely rural area that's still struggling with the collapse of the housing market and the construction industry. Coming on top of that, Keller says, the plant's closure hurts.

"It's definitely going to trickle down. I mean, if it hurts the economy any more than it's already hurting," he says. "Because our biggest problem is our sales are down, and that's primarily because our biggest clientele can't afford to go out and eat."

For more than 40 years, the county's main economic engine was the nuclear plant. Outside the gates of the Crystal River facility, you can still see steam rising — but that's from coal-fired power plants.

The company that owned the nuclear plant, Progress Energy, messed up in a big way. In an effort to upgrade the plant's steam turbines, company employees cracked the reactor's containment building. When they tried to fix it, they cracked it again.

Now, the plant's owners are saying they've decided to shut it down for good.

"We believe the decision to retire the nuclear plant is in the best interests of all of our customers, our investors, the state of Florida as a whole and our company," says Suzanne Grant, spokeswoman for Duke Energy, the company that took over Crystal River last year after merging with Progress Energy.

In looking at the cost and risks associated with repairing the damaged plant, Duke decided shutting it down was the most cost-effective option. But that leaves officials in Citrus County with some tough decisions to make.

A County's Tax Base Shrinks

In Crystal River last week, more than 100 officials and business leaders attended a Chamber of Commerce luncheon where county administrator Brad Thorpe laid out the grim details.

"We are in a crisis. You all know that," Thorpe told the group. "And you realize that we will get through this."

Even before it decided to close the nuclear plant, Duke Energy told Citrus County it believed it was paying too much in taxes. This year, the company paid just $19 million of a $35 million tax bill.

"It put us in a very difficult position," says Joe Meek, chairman of the Citrus County Commission. We're a community of 142,000 people. A business that pays 26 percent of our tax base will have a major impact when they don't pay that."

Citrus County and Duke Energy are in court over the tax dispute. But with the nuclear plant's closure, Meek says it's likely that the energy company will be paying even less in taxes and that county residents will have to pay more.

"The bottom line: There will be a bigger burden on the taxpayers who are here," Meek says. "Our community is primarily a retirement community. We pride ourselves with having a low cost of living. And so we're going to have to balance all those things, but we're going to do it."

But the pain from Crystal River's closure will be felt far beyond Citrus County. Duke Energy serves more than 1.5 million customers in Florida. It's those customers, not the company or its stockholders, who now will pay the bill from Crystal River — and it's a big one.

"I would imagine that the ratepayers will be out up to the tune of close to $4 billion as time goes on," says Mike Fasano, a state lawmaker who represents many of those ratepayers.

That total includes the botched upgrade, the cost of buying replacement power, funds to decommission the facility and the bill for a new gas-fired plant.

Fasano is working to repeal a Florida law that allows companies that build or expand nuclear plants to bill customers for all the costs, even if the plants never go online.

"It shouldn't be the ratepayers paying for something that many of them will never benefit from," Fasano says. "It should be the stockholders."

Although it's closing Crystal River, Duke Energy says it's still committed to nuclear energy. It has plans to build two new nuclear plants in Florida in the next decade.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

The operator of Florida's Crystal River nuclear plant sent shockwaves through the state recently. It announced that it was shutting down the facility for good. Nuclear plants can be unpopular but in Florida's Citrus County, north of Tampa, the Crystal River plant had become an important part of the economy. The closure comes after the plant's former owner botched a billion-dollar upgrade to the facility.

Now, as NPR's Greg Allen reports, customers and taxpayers are being left with the bill.

GREG ALLEN, BYLINE: When some nuclear plants have closed, communities have cheered. But in Citrus County, it's more like there's been a death in the family. At Fat Boy's Bar-B-Q Restaurant in Crystal River, owner Bubba Keller describes his mood.

BUBBA KELLER: Worried, yeah, what's going to happen. I mean, things are already tough. If this makes it worse, don't know if I can hang in there.

ALLEN: Keller's restaurant has been here for more than 40 years serving beef, pork ribs and chicken. When the Crystal River plant was operating, Fat Boy's Bar-B-Q could depend on regular takeout orders from the several hundred people who worked there. Those days are gone, though. The plant shut down for maintenance in 2009 and last week, Duke Energy announced it would not reopen.

Citrus County is a largely a rural area that's still struggling with the collapse of the housing market and the construction industry. Coming on top of that, Keller says, the plant's closure hurts.

KELLER: It's definitely going to trickle down. I mean, if it hurts the economy anymore than it's already hurting - 'cause our biggest problem is our sales are down. And that's primarily because our biggest clientele can't afford to go out and eat.

ALLEN: For more than 40 years, the county's main economic engine was the nuclear plant. Outside the gates of the Crystal River facility, you can still see steam rising but that's from coal-fired power plants. The company that owned the plant, Progress Energy, messed up in a big way. In an effort to upgrade the plant's steam turbines, Progress Energy employees cracked the reactor's containment building. When they tried to fix it, they cracked it again.

Now, the plant's owners are saying they've decided to shut it down for good.

SUZANNE GRANT: We believe the decision to retire the nuclear plant is in the best interests of all of our customers, our investors, the state of Florida as a whole, and our company.

ALLEN: That's Suzanne Grant with Duke Energy, the company that took over Crystal River last year after merging with Progress Energy.

In looking at the cost and risks associated with repairing the damaged plant, Duke decided shutting it down was the most cost-effective option. But it leaves officials in Citrus County with some tough decisions.

UNIDENTIFIED MAN: Ladies and gentlemen, if you would please begin taking your seats.

ALLEN: In Crystal River last week, more than 100 officials and business leaders attended a Chamber of Commerce luncheon, where county administrator Brad Thorpe laid out the grim details.

BRAD THORPE: We are in a crisis. You all know that. And you realize that we will get through this.

ALLEN: Even before it decided to close the nuclear plant, Duke Energy told Citrus County it believed it was paying too much in taxes. This year, the company paid just $19 million of a $35 million tax bill.

Joe Meek is the chairman of the Citrus County Commission.

JOE MEEK: And so, it put us in a very difficult position. We're a community of 142,000 people. A business that pays 26 percent of our tax base will have a major impact when they don't pay that.

ALLEN: Citrus County and Duke Energy are in court over the tax dispute. But with the nuclear plant's closure, Meek says it's likely that the energy company will be paying even less in taxes - and county residents will have to pay more.

MEEK: The bottom-line: There will be a bigger burden on the taxpayers who are here. Our community is primarily a retirement community. We pride ourselves with having a low cost of living. And so, we're going to have to balance all those things but we're going to do it.

ALLEN: But the pain from Crystal River's closure will be felt far beyond Citrus County. Duke Energy serves more than a million-and-a-half customers in Florida. And it's those customers, not the company or its stockholders, who now will pay the bill from Crystal River - and it's a big one.

STATE REP. MIKE FASANO: I would imagine that the ratepayers will be out up to the tune of close to $4 billion as time goes on.

ALLEN: That's four billion with a B. Mike Fasano is a state lawmaker who represents many of those ratepayers. That total includes the botched upgrade, the cost of buying replacement power, funds to decommission the facility and the bill for a new gas-fired plant.

Fasano is working to repeal a Florida law that allows companies that build or expand nuclear plants to bill customers for all of the costs, even if the plants never go online.

FASANO: It shouldn't be the ratepayers paying for something that many of them will never benefit from. It should be the stockholders.

ALLEN: Although it's closing Crystal River, Duke Energy says it's still committed to nuclear energy. It has plans to build two new nuclear plants in Florida in the next decade.

Greg Allen, NPR News, Miami. Transcript provided by NPR, Copyright NPR.