Taxpayers Steaming Over Florida Nuclear Plant's Shuttering

By Greg Allen

Published February 14, 2013 at 5:12 PM EST

The Crystal River Nuclear Plant has stood idle since workers cracked the reactor's containment building in 2009. The facility is now slated to close permanently.

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.

Duke Energy, which owns the Crystal River plant, says it decided closing the facility was more cost effective than attempting to repair it.

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.