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Duke Energy abandons plans to build the Lee Nuclear Station — Charlotte Business Journal

By John Downey

Duke Energy Carolinas wants to cancel its planned Lee Nuclear Station and will ask regulators to allow it to recover at least $368 million in planning and pre-construction costs from N.C. customers.

Duke notes its plan for Lee as part of its request for a 13.9% rate increase filed Friday with the N.C. Utilities Commission. And it filed a separate proposal specifically on canceling the project. Duke filed both with the commission shortly after 10 a.m. Friday.

The decision comes as the designer and principal contractor Duke chose for the project finds itself in bankruptcy court. And it follows a decision made just more than three weeks ago by neighboring utilities in South Carolina to abandon a similar nuclear project, even though they have spent $9 billion already and the project is nearly two-thirds complete.

But the Charlotte-baed utility cannot unilaterally cancel the project, says its N.C. President, David Fountain. “We’ve got to seek the commission’s approval to cancel the project.”

To ease impact of Lee’s cost on the rate hike, Duke wants to spread recovery of the $368 million over 12 years.

Half a billion spent

The cost allocation would be North Carolina’s share of the $541 million Duke Carolinas spent to date on the plant it had proposed building in Gaffney, S.C. The remaining $173 million would be attributable to the utility’s South Carolina customers.

There could be some small additional costs for Lee going forward, even if the commission approves cancelation.

Duke Carolinas, a subsidiary of Duke Energy Corp. (NYSE:DUK), announced plans for a $6 billion, two-reactor nuclear plant in 2005. It announced in 2006 that the plant would be built on 2,022 acres in Gaffney.

Duke had chosen that same site for a nuclear plant in the 1970s. Though construction of that plant began, it was abandoned in the early 1980s as nuclear power lost support nationally in the wake of the 1979 nuclear meltdown at the Three Mile Island Nuclear Generating Station in Harrisburg, Pa.

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