Duke Energy Florida will spend $1 billion to add 700 MW of solar energy over the next four years and forego recovery of more than $150 million from customers for an abandoned nuclear project under a revised settlement filed Tuesday with the Florida Public Service Commission.
Among the key parties that signed onto the deal, in addition to Duke, were the Florida Office of Public Counsel, Florida Industrial Power Users Group, Florida Retail Federation and the Southern Alliance for Clean Energy.
"If approved by the commission at the end of the year, the agreement will take effect January 2018 and will include investments of nearly $6 billion over the next four years while minimizing the impact on Duke Energy customer bills," Duke said in a statement. The utility serves almost 1.8 million customers in Florida.
The company plans to begin construction early next year on a 74.9-MW universal solar project in Hamilton County, its sixth Florida solar plant, with completion anticipated in early 2019, Duke spokeswoman Ann Marie Varga said.
She said Duke intends to buy or build the 700 MW of solar energy it intends to add by 2021.
The agreement also includes plans to install more than 500 electric vehicle charging stations and up to 50 MW of battery storage, and install smart meters.
In addition to the major solar investment, another key provision of the accord is Duke's decision to finally put to rest its Levy nuclear project in Levy County with no further charges to customers.
Duke announced in 2013 it was ending an engineering, procurement and construction contract with Westinghouse for the estimated $24 billion project, and litigation between the two companies ensued.
At the time, however, Duke also suggested it might consider locating a nuclear plant at the site in the future.
Finally walking away from the nuclear project was an important factor in the Office of Public Counsel's decision to join the pending settlement, said Charles Rehwinkel, the deputy public counsel.
While Duke said it will absorb more than $150 million in Levy-related costs that otherwise would be borne by ratepayers, Rehwinkel estimated the potential savings to customers at $250 million to $750 million "in future avoided costs from the abandoned nuclear project."
Among other things, Duke will take about $94 million worth of land out of rate base if the settlement is approved, he noted.
Other provisions of the settlement include a reduction of $2.53 per 1,000 kWh for residential customers by spreading the costs for under-recovered fuel of approximately $196 million over a two-year period, instead of one year.
The settlement "allows us to move forward to create a smarter energy future for our customers and communities," Harry Sideris, Duke Energy state president, said in a statement. "It resolves the future of the Levy nuclear project and reinforces our commitment to building cost-effective solar in Florida. It also makes smart investments that will offer customers more information, choices and control of their energy needs while also providing greater reliability."
Stephen A. Smith, executive director of the Southern Alliance for Clean Energy, said in a statement that large-scale solar, electric vehicles and battery storage "demonstrate that Duke is embracing technologies of the 21st century. We welcome Duke's willingness to work with stakeholders on data collection and any rate design changes impacting customer-owned demand-side solar."
Duke Energy Carolinas asks regulators for OK to cancel S.C. nuclear project
Another Duke Energy company recently moved to cancel a nuclear project. Citing the recent bankruptcy of Westinghouse Electric Company, Duke Energy Carolinas, or DEC, on Aug. 25 asked state utility regulators to allow DEC to cancel its plans to build a nuclear power plant in South Carolina.