September 14, 2008

New Plant Based on Excellent Track Records

By Scarola, Jim

1. What is Progress Energy 's motivation in applying for combined operating license for Shearon Harris Units 2 and 3? Since the company last added baseload generation in the Carolinas in the mid- 1980s, Progress Energy Carolinas has added almost half a million new customers. Our service area in the Carolinas is growing by 25,000 to 30,000 new homes and businesses every year. We need a new baseload plant in order to meet the energy needs of our customers. Carbon- free nuclear has to be a consideration for the future.

2. What is the electrical power output of the sites ?

The Harris Unit 1 reactor is a 900 megawatt unit. The two proposed units would each have 1,100 megawatt capacities.

3. WAo were the contractors preparing combined operating license?

The COLA preparation was conducted by a Joint Venture Team that includes Sargent and Lundy, Worley Parsons and CH2MHILL.

4. Who is supplying the a) reactor pressure vessel b) turbine c) generator d) and other long lead items ?

We have not yet entered into a contract with any vendors, but we have previously announced that we are looking at the Westinghouse AP1000 design.

5. Who is the architect engineer of Progress Energy? What are the current activities Progress Energy is involved in, in addition to answering U.S. NRC's questions in combined operating license? Please provide a schedule for the completion of the combined operating license review and indicate the priorities of Progress Energy during the period of review of the combined operating license.

The AP1000 is a Westinghouse design. Westinghouse and The Shaw Group, Inc. (Shaw, Stone and Webster) have partnered to complete design and construction. In addition to supporting the NRC review of the Harris COLA, Progress Energy is preparing a COLA for two AP1000 units to be located in Levy County, Florida. Progress Energy is actively involved in industry initiatives that address various issues associated with licensing, design, construction and operation of new reactors.

The NRC has estimated that the review and approval of the COLA will require about 3 1/2 years. Progress Energy priorities associated with new plant during this period includes:

* Support of NRC review

* Procurement of long-lead equipment

* Finalization of engineering design to support site preparation and plant construction

* Development of the organization required to support construction, initial plant staffing and operation

6. Is U.S. NRC's 60 day application completeness review over? Please describe any challenging aspects in NRC license review status. What is the construction start date and what is the operation date of Units 2 and 3 ?

The Harris COLA was submitted to the NRC on 2/19/08. We estimate that the sufficiency review will be completed in mid-April. The NRC review will involve site visits, audits and requests for additional information which require prompt response by Progress Energy to support the NRC review schedule. Progress Energy has not made a final decision to build the Harris Nuclear Plant but if a decision to build is made, we anticipate that the plant would be in service in 2018 or later.

7. How has Progress Energy developed its human resource needs? Have they directly hired the needed technical and administrative staff or have they subcontracted the projects?

Staffing in support of the new plant projects is a mix of Progress Energy personnel and contractor support.

8. Who are the vendors responsible for design, engineering, procurement and construction ?

Contract negotiations are in progress, however, we do not have a contract for these activities.

9. Nuclear steam supply system suppliers take pride in completing the construction "under budget" and "ahead of schedule." Please indicate any specific construction highlights that will economize the construction cost and expedite the schedule.

The AP1000 design and construction plans involve the use of modular construction techniques which should reduce the time for construction. This approach also allows more fabrication to be conducted off-site and should result in on-site work to be done with smaller onsite work force.

10. How is this plant similar to other plants worldwide?

The new units at the Harris site have yet to be constructed, but are one of three NRC-approved reactor designs. Several other utilities have also selected the Westinghouse AP1000 for construction at their respective sites.

11. Describe briefly the salient new features and the specifications of Units 2 and 3.

The continuous evolution of technology results in ongoing safety and efficiency improvements in the nuclear industry. Newer reactor designs will build on the industry's excellent safety record by using fewer moving parts and more failsafe cooling systems that rely on natural forces of gravity, natural circulation, etc., instead of power supplies and motordriven components. The reactor design Progress Energy is exploring for the Carolinas has 85 percent less cable, 80 percent less pipe, 50 percent fewer valves and 35 percent fewer pumps than today's generation of reactors.

12. What is the total construction period for the unit?

The plant construction is estimated to require 4 years after license approval.

13. Is Progress Energy utilizing other utilities experience to support the different phases of Units 2 and 3 licensing, design, engineering, construction, procurement and operation ?

Progress Energy is a member of NuStart and actively works with other members via NuStart and other industry forums to address licensing, design, construction, procurement and operational issues. We also closely monitor and use operating experience from the nuclear fleet and participate in benchmarking activities focused on new plant construction.

14. What was the criteria for site selection ofShearon Harris Units 2 and 3?

When choosing a prospective site for a new reactor, three considerations are essential: the availability of land, water and transmission capacity. The Harris Nuclear Plant has all three. If pursued, the second reactor would be built on an existing plant site where significant infrastructure is already in place. We can capitalize on well-trained personnel at the site, and an emergency plan that has already been established and drilled for years.

15. Please describe the local community support to Progress Energy for Units 2 and 3. Are there any existing units at the site where the units are being proposed for construction ?

Based on an economic impact study conducted by N. C. State professor Dr. Ed Erickson, the economic impact of the construction phase for one unit is substantial. The average additional annual impacts during the licensing and construction phases are projected to be roughly:

* $345 million in output"

* 3,500 jobs

* $10 million in municipal and county tax collections on real property

Once the new facility is fully operational, it is estimated that the combined Harris facility will generate annually:

* $2.2 billion in output*

* 4,800 jobs

* $30 million in municipal and county tax collections on real property

These economic impacts contribute to a positive relationship with the communities surrounding the plant. There are vocal critics of nuclear power (in general) primarily in counties outside the plant's 10-mile radius, but for the most part our neighbors have confidence in plant safety based on a 20-year track record of safe, reliable operation of the existing unit on the site.

16. What are Progress Energy's achievements including records and awards in refueling outages, operation, maintenance and Top Industry Practice Awards (by Nuclear Energy Institute)?

Progress Energy has an outstanding track record and is recognized worldwide as an industry leader in safe, reliable nuclear operations. We operate five reactors in three states, and the outstanding performance of those plants over the last three decades has helped to keep service reliability high and prices stable and affordable for our customers.

A few examples:

* In 2003, Harris was the lowest cost (in terms of dollars to operate per megawatt produced) single unit operation in the country. The single-unit Harris figures were even competitive with multiple- unit plant sites. In fact, Harris has consistently ranked among the most economically run plants in the country for the last seven years.

* In 2003, the Progress Energy nuclear fleet set a new company record by generating approximately 35 million megawatt-hours (MWH) of electricity during the year for its 2.8 million customers in the Carolinas and Florida.

* EEI presented Progress Energy with the 2006 Edison Award based on the company's outstanding achievements in operational performance, reliability and customer service, and environmental stewardship.

* In 2007, the Harris Plant celebrated 20 years of safe, reliable operation and beat a plant record for producing the most electricity in a year with a refueling outage.

* The Nuclear Energy Institute awarded the Brunswick Nuclear Plant with its 2006 Top Industry Practice (TIP) Award.

* Robinson completed 2006 with an INPO performance index of 100 (best ever), and record electrical generation of 6,442,698 MWH, which represents a capacity factor of 103.8%.

* For the year 2007, which included a planned refueling outage, Robinson achieved a capacity factor of 92.3% and an INPO performance index of 98. * From 2004 to 2006, Crystal River's production cost was in the top 25 percent of the most cost-efficient plants in the nation. In 2006, it ranked in the top 10 percent. Crystal River has consistently ranked among the most economically run plants in the country for the last several years.

* In 2007, the Crystal River Nuclear Plant celebrated 30 years of safe, reliable operation.

17. What is Progress Energy's environmental partnership, achievements and awards for its past performances in operating its nuclear power plants?

Progress Energy has a strong operational record and a growing customer base. The company is focusing on the regulated electric utility business and expects to complete divestitures of nonregulated businesses in 2008. This will make Progress Energy the largest utility focused solely on the regulated electric utility business. Our focus on core business has achieved significant results. In 2006, the operational excellence achieved by Progress Energy resulted in the industry's highest honor: the Edison Award. In addition, the four nuclear plants operated by Progress Energy are consistently ranked among the industry's best in production, safety and cost efficiency.

Background Information

The Harris Nuclear Plant began commercial operation in 1987. Progress Energy has more than 30 years of experience in operating nuclear power plants, with its first nuclear plant (the Robinson Plant near Hartsville, S.C.) coming online in 1971. U.S. nuclear plants are licensed by the Nuclear Regulatory Commission (NRC) to operate for 40 years. The Harris Plant is licensed until 2026. Progress Energy has applied to the NRC for a license extension to allow operation of the Harris Plant for an additional 20 years, until 2046.

Progress Energy operates five reactors at four nuclear plant sites - the two-unit Brunswick Nuclear Plant near Southport, N.C.; the Crystal River Nuclear Plant near Crystal River, FIa.; the Harris Nuclear Plant near New Hill, N.C.; and the Robinson Nuclear Plant near Hartsville, S.C. Together, they are capable of generating more than 4,300 megawatts of safe, reliable and efficient electricity.

Contact: Rick Kimble, P, O, Box 1551, Raleigh, NC 27602; telephone: 919-5467111, fax: 919-546-6615, email: Rick. Kimble

Repsonses to questions by Newal Agnihotri, Editor of Nuclear Plant Journal.

* The net final demand, or effectively the economic activity, generated by the entity in question for the regional economy. In other words, if you excluded Harris, how much economic activity would be lost in the Triangle J+l, in 2020, as measured in 2005 dollars. So, it does include the revenues generated by plant, to the extent that those stay in the regional economy.

By Jim Scarola, Progress Energy.

Jim Scarola

James (Jim) Scarola is senior vice president and chief nuclear officer of Progress Energy. Scarola has been with Progress Energy since 1998, and has served as vice president of the Brunswick Nuclear Plant and as vice president of the Harris Nuclear Plant.

Immediately prior to joining Progress Energy, Scarola was general manager of FP&L's St. Lucie Nuclear Plani. In all, Scarola has been in the nuclear power field for 30 years, including positions in design engineering, construction, startup testing, maintenance, engineering, and operations.

Scarola holds a degree in electrical engineering from the University of Notre Dame and a master's degree in business administration from the Florida Institute of Technology, He Has also completed the Darden Executive Management Program at the University of Virginia.

Copyright EQES, Inc. May/Jun 2008

(c) 2008 Nuclear Plant Journal. Provided by ProQuest LLC. All rights Reserved.