Levy Nuclear Project Jeff Lyash President & CEO Progress - - PowerPoint PPT Presentation

Levy Nuclear Project

Jeff Lyash President & CEO Progress Energy Florida Progress Energy Florida

A Balanced Solution for the Future A Balanced Solution for the Future

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Pl i t M t Fl id ’ E N d Planning to Meet Florida’s Energy Needs

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V l til F l P i Volatile Fuel Prices

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Fuel Diversity to Serve Florida’s Energy Needs y gy

Energy Generation by Fuel Type (percent of total)

Source: FPSC Review of 2008 10-Year Site Plans

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Policy Decisions Promote Timely Results

Inception to Construction

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2006 Fl id N l I t t A t

Pre-construction and licensing

2006 Florida Nuclear Investment Act

Capacity cost recovery clause (CCRC) Costs are recovered dollar for dollar

During construction

g

AFUDC is recovered through CCRC 8.848% AFUDC rate is locked until commercial operation Annual prudence reviews

p

Completion

Base rate adjustment at in-service for capital costs ROE and capital structure based on last approved levels ROE and capital structure based on last approved levels

(currently 11.75% ROE on 57.83% common equity)

Project cancellation cost recovery

Full recovery of costs incurred if project is cancelled

Full recovery of costs incurred if project is cancelled

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L N l P j t Levy Nuclear Project

Location Technology # of units Capacity (MW) In Service Levy County, Florida Westinghouse AP1000 2 ~2,200 total 2016 - 2018

• 8 miles NE of our Crystal River
• 8 miles NE of our Crystal River

Energy Complex

• Signed engineering,

procurement & construction (EPC) agreement with Westinghouse and Shaw

• Negotiating joint ownership

with multiple parties (1) with multiple parties (1)

• Site prep and pre-construction

begin ~2010/11; safety-related construction begins 2012/13 g

(1) Confidentiality obligations preclude us from discussing this further until the negotiations are completed.

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EPC A t Hi hli ht EPC Agreement Highlights

Signed December 2008 with Westinghouse Electric Company and

St & W b t b idi f Th Sh G Stone & Webster, a subsidiary of The Shaw Group

Two 1,105-net MW, AP1000 nuclear reactors EPC contract price = $7 65B EPC contract price = $7.65B

> 50% of which is fixed price or firm price with agreed-upon

escalation factors

Includes various performance incentives, penalties, warranties, Includes various performance incentives, penalties, warranties,

liquidated damage provisions and parent guaranties

Total estimated cost for the two generating units = ~$14B

Includes land price plant components construction labor regulatory Includes land price, plant components, construction, labor, regulatory

fees and reactor fuel for the two units, and

Forecasted inflation, owner costs, financing costs and contingencies

Additional $3B estimated for associated transmission facilities Additional $3B estimated for associated transmission facilities 9

L N l P j t A ti iti Levy Nuclear Project Activities

EPC Agreement executed on 12/31/08 EPC Agreement executed on 12/31/08 SCA Hearing (state siting) began 2/23/08

NRC COLA schedule pending

NRC COLA schedule pending Nuclear cost recovery proceeding under way Post EPC organization being formed Positioning for early construction

Barge, temporary haul path

Transmission project effort progressing

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R l t Ti li f L P j t Regulatory Timeline for Levy Project

Mar. May July Sept. Oct.

2010

June

2012/13 2008

Aug. April y y p

2010 2012/13 2008

g Filed Hearing Vote Order

Need Case

p Filed Hearing Order Filed Hearing Vote Order

Need Case Cost Recovery

Issued Filed (18 month review)

Site Certification

Issued Filed (3 - 4 year review)

Combined License

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K t S Keys to Success

Policy and regulatory stability

♦ Recognition of nuclear as a clean energy source ♦ Recognition of nuclear power’s role in energy security ♦ Resource commitment to support timely licensing/permitting

Financial continuity

♦ Financial tools to maintain utility strength during construction ♦ Options to mitigate early customer price impacts ♦ Options to mitigate early customer price impacts

Workforce development

♦ To build the plant p ♦ To operate the plant

Supply chain development

pp y p

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