The performance problems that have hobbled Progress Energy's H.B. Robinson nuclear plant will cost the Raleigh utility $24 million.
The Raleigh-based electric utility agreed not to make North Carolina customers pay $24 million in costs associated with the outages, fires and other mishaps that caused the plant to be shut down almost six months of 2010.
On Thursday Progress and the Public Staff, the state's consumer advocate, announced an agreement that will require Progress to eat those costs.
The Public Staff said that the costs associated with the outages were caused by substandard performance. As a result of the forced shutdowns at the Robinson plant, Progress had to spend extra to generate electricity at less efficient power plants and to buy power from other utilities.
Power companies in North Carolina are allowed to pass through their costs of fuel to customers as long as those expenses are prudent. Electric utilities make the claims once a year for approval by the N.C. Utilities Commission.
It's only the fourth time in the state's history that a power company will not fully recover its fuel and related costs due to power plant performance. All three previous such disallowances took place in the 1990s, most recently in 1994 preventing Carolina Power & Light to recover $3.5 million for performance issues at the Robinson plant.
Even with the $24 million reduction, Progress residential customers will be paying about nearly $3 a month more for electricity starting in December because coal and other fuel costs increased overall. The rate increase will raise a typical household bill from about $102 to nearly $105.
Taking $24 million out of the equation shaves off about 70 cents from the monthly bill of a typical residential customer that uses 1,000 kilowatt hours of electricity in a month.
Progress spent nearly $1.2 billion on fuel and related costs in 2010.
In July, the Nuclear Regulatory Commission removed the Robinson plant form a watchlist of the nation's worst-performing nuclear plants. The plant has been operating without incident more than 300 days.
The performance downgrade had prompted a management shakeup at the Robinson plant, resulting in the dismissal of about a dozen executives and managers.
Within a 12-month period, the Robinson plant experienced four unplanned shutdowns, two electrical fires and a power failure. The NRC cited the plant with more than a dozen violations of NRC rules and procedures.
However, the NRC allowed the Robinson plant to continue generating electricity. The NRC said the violations were not significant enough to raise safety concerns.
The Robinson plant is based in South Carolina but produces electricity used in both Carolinas.