07-002713EPP In Re: Progress Energy Florida, Crystal River Unit 3 Uprate Project Power Plant Siting Application No Pa77-09a2 vs. * Status: Closed Recommended Order on Thursday, June 5, 2008.

Summary: Recommend that the Power Plant Siting Board certify Florida Progress Energy`s Crystal River Unit 3 nuclear generating facility, including the 180 MW Uprate Project.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: PROGRESS ENERGY )

FLORIDA, CRYSTAL RIVER UNIT 3 )

UPRATE PROJECT POWER PLANT ) Case No. 07-2713EPP

SITING APPLICATION NO PA77-09A2 )

)

RECOMMENDED ORDER ON CERTIFICATION

The certification hearing in this case was held on

March 17, 2008, in Crystal River, Florida, before Administrative

Law Judge Bram D. E. Canter of the Division of Administrative

Hearings.

APPEARANCES

For Florida Power Corporation:

Douglas S. Roberts, Esquire

Virginia C. Dailey, Esquire

Hopping Green & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314

For the Florida Department of Environmental Protection:

Toni Sturtevant, Esquire

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

STATEMENT OF THE ISSUE

The issue to be determined in this case is whether the Siting Board should certify Crystal River Unit 3 at the Crystal River Energy Complex in Citrus County, Florida, owned and

operated by Florida Power Corporation, doing business as

Progress Energy Florida, Inc. (Progress Energy).

PRELIMINARY STATEMENT

On June 12, 2007, Progress Energy filed its application for

site certification with the Florida Department of Environmental

Protection (Department), pursuant to the Florida Electrical

Power Plant Siting Act, Chapter 403, Part II, Florida Statutes

(2007), 1 and Florida Administrative Code Chapter 62-17. Copies

of the application were distributed to other agencies for their

review and copies were made available for public review at the

local library. The application for certification was prompted

by Progress Energy’s proposal to add 180 megawatts (MW) of

nuclear-powered electrical generating capacity to Crystal River

not previously been certified, it is the intent of Progress

Energy and the Department that all of Crystal River Unit 3, both

the existing facilities and the proposed Uprate Project, be

certified at this time.

On July 20, 2007, the Department issued a Determination of

Incompleteness and requested additional information from

Progress Energy concerning its application. On August 22, 2007,

Progress Energy filed its responses to the Department’s

Determination of Incompleteness. On September 11, 2007, the

Department determined that the application was complete.

On August 1, 2007, Citrus County issued its Determination

of Compliance with Local Land Use Plans and Zoning, pursuant to

Section 403.50665, Florida Statutes, finding that the Uprate

Project was consistent with the comprehensive plan and zoning

ordinances of Citrus County. Following public notice of the

determination, no person filed a petition to challenge the

County’s land use consistency determination.

On February 1, 2008, the Department issued its Staff

Analysis Report pursuant to Section 403.507(5), Florida

Statutes. The Staff Analysis Report contained reports from

other agencies and proposed Conditions of Certification.

No person sought to intervene and participate as a party in

the certification hearing. Progress Energy and the Department

filed a Prehearing Stipulation in which no disputed issues of

fact or law were identified.

At the certification hearing, Progress Energy presented the

live testimony of Ken Wilson, Harold Frediani, Jr., David

Bruzek, and Kelly Gleaton. The pre-filed testimony of these

witnesses was also presented by Progress Energy and accepted

into evidence. Additional pre-filed testimony was presented and

accepted into evidence for David Bear, Carl Bullock, Jason

Collins, and Scott Osborne. Progress Energy’s Exhibits 1

through 9 were admitted into evidence. The Department presented

the testimony of Cindy Mulkey. The Department’s Exhibits 1 and

2 were admitted into evidence. No agency other than the

Department appeared at the hearing.

Following the presentation of evidence by the parties, a

hearing was held for the exclusive purpose of receiving

testimony from members of the general public. Four members of

the public provided testimony. None opposed the Uprate Project.

On May 1, 2008, the Administrative Law Judge requested, and

the parties agreed to file, supplemental written testimony and

proposed findings of fact regarding the structures, operations,

and permitting conditions associated with the existing Crystal

River Unit 3 facilities. The parties jointly filed the

supplemental information on May 23, 2008, which included

additional sworn written testimony by Ken Wilson.

The one-volume Transcript of the hearing was filed with the

Division of Administrative Hearings. Progress Energy and the

Department filed a joint proposed recommended order which was

duly considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Florida Power Corporation, doing business as Progress

Energy Florida, Inc., is an investor-owned utility that provides

electric service to more than 1.7 million customers in its

Florida service area. Progress Energy’s service area covers

20,000 square miles in 35 Florida counties.

2. Crystal River Unit 3 is part of Progress Energy’s 738-

acre Crystal River Energy Complex, which is located in an

unincorporated area of northern Citrus County. Yankeetown,

Inglis, and the City of Crystal River are within a five-mile

radius of the Complex.

3. The Crystal River Energy Complex has five electrical

generating units. Units 1 and 2 are coal-fired units which were

constructed in the 1960s and produce approximately 900 MW. Unit

3 is a nuclear-powered unit that went into operation in 1977,

and also generates about 900 MW. Units 4 and 5 are 750 MW coal-

fired units which became operational in the mid-1980s after

being certified under the Power Plant Siting Act. The

electrical power generated by the five units is delivered to

Progress Energy’s electrical transmission system through shared

230 kV and 500 kV switchyards on the Crystal River Energy

Complex site.

4. Cooling water for Crystal River Units 1, 2, and 3 is

withdrawn from an intake canal which connects to Crystal Bay and

the Gulf of Mexico. Water is pulled from the intake canal by

pumps, sent through the condensers for Units 1, 2 and 3, where

it becomes heated, and then is carried out to Crystal Bay via

the discharge canal. The discharge canal extends approximately

1.2 miles offshore.

5. Crystal River Units 1, 2, and 3 share a supplemental or

“helper” cooling tower system, which uses mechanical draft

towers through which air is moved by large fans. When the

temperature of the combined discharge water approaches 96.5

degrees Fahrenheit, heated water is withdrawn from the discharge

canal and sent through the helper tower cells to cool the water

enough so that when it is returned to the discharge canal, the

combined temperature in the water will not exceed the permitted

limit of 96.5 degrees F on a three-hour rolling average.

6. Progress Energy operates a Mariculture Center at the

Complex, which is a multi-species marine hatchery established in

the early 1990’s to mitigate fisheries impacts caused by the

introduction of heated water into adjacent waters. Progress

Energy has also implemented a Department-approved manatee

protection plan that establishes a number of guidelines to

minimize adverse impacts to manatees at the intake and outfall

areas.

7. A sea turtle monitoring and rescue program has been

initiated by Progress Energy to reduce potential sea turtle

strandings and mortalities at Crystal River Unit 3. Progress

Energy has implemented a Sea Turtle Rescue and Handling Guidance

program which provides instructions for sea turtle observation,

rescue, handling, notifications, and reporting requirements.

Rescued sea turtles are transferred to the Mariculture Center

for health evaluation, and either tagged and released or

transferred to a qualified center for treatment and

rehabilitation, as appropriate.

8. The land uses in the area immediately surrounding the

Complex are primarily undeveloped agricultural and forested

lands, and some mining operations. Most of the area within a

five-mile radius of the Complex consists of agricultural,

industrial, or open lands. The nearest occupied residence is

over three miles away to the northeast.

9. Since Unit 3 began operations, there has been active

mining and some rural residential and commercial development

along US 19 between Crystal River and the plant site, all of

which is more than five miles away.

Crystal River Unit 3 – Existing Facilities to be Certified

10. Crystal River Unit 3 was not previously certified

under the Power Plant Siting Act, because it was under

construction before the Siting Act took effect. If the Uprate

Project is certified, it is the intent of Progress Energy and

the Department to make all of Unit 3 subject to the Conditions

of Certification and to the Siting Act.

11. Unit 3 is a pressurized water nuclear reactor. The

unit operates in a baseload condition, which means it operates

on an almost continuous basis throughout the year except for

scheduled outages. The unit is composed of a primary and

secondary system. The primary system is comprised of the

nuclear reactor, four reactor cooling pumps, and two steam

generators. The steam generators convert the heat from the

nuclear reaction into steam that is transferred to the secondary

system. In the secondary system, the steam is used to drive a

steam turbine/electrical generator. Electricity is then sent to

the existing electrical onsite switchyards for distribution over

Progress Energy’s electrical transmission system.

12. The condenser is essentially a large metal box with

thousands of small diameter tubes through which “circulating

water” is flowing. Steam from the steam turbines is introduced

into the condenser box and when the steam contacts the outer

wall of a water-laden tube, heat is drawn from the steam,

through the tube wall, and into the circulating water. This

causes the steam to cool and condense. The condensed steam,

called "condensate", is collected in the bottom of the box, and

recycled to minimize water consumption. Warmed water from Unit

3 is then released to the discharge canal.

13. The Unit 3 site is 26.86 acres of developed land

within the Crystal River Energy Complex. The site contains no

significant environmental features. No archaeological or

historical features have been found on the site, but Progress

Energy has agreed to consult with the Division of Historical

Resources if any archaeological or historical finds are made at

the site.

14. The major components of Unit 3 to be certified are the

nuclear reactor and its related facilities. The facilities to

be certified include the control complex, the turbine building,

and auxiliary and intermediate buildings which are associated

with the normal operation of Unit 3, the nuclear administrative

building, plant administrative buildings, the technical support

center, and warehouse and support buildings, the Unit 3 intake

and discharge structures, and the reactor head storage building

and maintenance training facility.

15. Unit 3 is supported by several common facilities that

also serve some or all of the other generating units at the

Complex. These common facilities include the helper cooling

towers along the discharge canal, onsite warehouses, site

administrative building, parking lots, electrical switchyards,

transmission lines and the site access road. The intake and

discharge canals also serve all of the existing units and are

considered to be common facilities for the Complex. These

common facilities are not being proposed for certification.

16. There is a potable water treatment facility and a

domestic wastewater treatment plant that serve Units 1, 2 and 3.

No changes to these facilities are required for the Uprate

Project. Both are located outside of the Unit 3 certification

area.

Existing Permits

17. There is an existing state industrial wastewater

permit that applies to the operation of all five generating

units at the Complex. This permit covers a series of basins

that act as settling and percolation ponds. The basins are

subject to a groundwater monitoring program to monitor for

compliance with state groundwater standards.

18. Under federal delegation, the Department issued a

National Pollutant Discharge Elimination System (NPDES) permit

for Units 1, 2 and 3. The NPDES permit covers the discharge of

once-through condenser cooling water from Units 1, 2 and 3, Unit

3’s auxiliary cooling water, treated coal pile runoff from Units

1 and 2, and other liquid waste streams.

19. The Department has also issued a Title V air operation

permit for the Crystal River Energy Complex that covers all five

generating units. This permit was issued by the Department

under the federal Clean Air Act, acting on behalf of the federal

EPA. Unit 3 does not have air emissions that are subject to the

permit, except for any air emissions from the existing helper

mechanical cooling towers. The Title V permit covers three

diesel generators for Unit 3 as unregulated air emissions units.

20. Progress Energy is operating Crystal River Unit 3 in

compliance with all of the conditions of these permits.

21. The result of certification of the Uprate Project

under the Siting Act will be the combining of all required state

permits into one complete set of Conditions of Certification.

Because several of the existing permits issued to Progress

Energy for Unit 3 cover other uncertified units at the Complex,

those permits would continue in force and would not be replaced

by the Conditions of Certification. Instead, those separate

permits are incorporated by reference in the body of, and

attached as appendices to, the proposed Conditions of

Certification.

22. The common permits that apply to Unit 3 and other

units at the Complex, and which were described above as not part

of the Unit 3 certification, would not be renewed pursuant to

the Siting Act. They would be renewed under the “normal”

procedures applicable to other regulated industrial facilities.

However, modified and reissued permits, as they relate to Unit

3, would be incorporated by reference into the Conditions of

Certification.

23. The permits issued by the Department under the federal

Clean Air Act and Clean Water Act are not subject to the Florida

Power Plant Siting Act. The Siting Act provides that federal

permits are reviewed and issued separately by the Department,

but in coordination with the Siting Act process to the extent

possible. However, these federal permits would also be attached

to and incorporated into the Conditions of Certification for

Crystal River Unit 3. As those permits are modified or reissued

in the future, they would be incorporated.

24. The Department has already issued a Prevention of

Significant Deterioration (PSD) permit for the proposed South

Cooling Tower. The PSD permit is also incorporated by reference

into the proposed Conditions of Certification.

25. The conditions provide for post-certification review

of the proposed South Cooling Tower. Progress Energy will

design that tower and select its final site. Progress Energy

will then submit to the Department documentation on stormwater

management and wetland impacts, as well as a wetlands mitigation

plan, if necessary, for the cooling tower site. The Department

will then review and approve this tower under its Environmental

Resource Permitting requirements. Construction of the tower

cannot begin until the Department approves it. This post-

certification review is typical for power plant siting cases and

insures compliance with applicable agency criteria and

Conditions of Certification.

The Uprate Project

26. The Uprate Project would add 180 MW of generating

capacity to Unit 3, for a total of 1,080 MW. The Uprate Project

does not affect the other four generating units within the

Crystal River Energy Complex.

27. Unit 3 would not have to be physically expanded to

obtain the additional electrical generation. The Uprate Project

involves modifications and replacements of existing plant

components to increase the efficiency of the unit, principally

within the secondary system of the unit, as well as to support

increased electricity production.

28. The Uprate Project would be undertaken in two phases.

In 2009, during an already-scheduled refueling outage and steam

generator replacement for Unit 3, the low pressure turbines and

electrical generator would be replaced or rebuilt, as needed.

Additionally, a number of secondary side components, including

heat exchangers and associated piping and valves, would be

modified or replaced. The net effect of these initial

modifications would be to increase the efficiency of the

secondary plant portion of Unit 3 so that the same primary plant

output results in approximately 40 MW greater electrical output.

29. In the second stage of the Uprate Project, additional

plant modifications will be undertaken during a scheduled outage

in 2011. These modifications would include replacing the high

pressure turbines, replacing the condensate, feed-water booster

and circulating water pumps and/or motors to increase their flow

capacity, and other associated modifications. This second set

of modifications is expected to increase the electrical output

by an additional 140 MW, and allow Unit 3 to generate

approximately 1080 MW.

30. The Uprate Project would include alterations that

would elevate Unit 3’s thermal, or warm water, discharge. As

one option for offsetting the increased thermal discharge,

Progress Energy has developed a conceptual design plan for a new

South Cooling Tower. The planned additional cooling tower would

also be operated to avoid or minimize increased flow to the

intake canal from Crystal Bay. This would be accomplished by

routing a portion of the new cooling tower’s discharge to the

intake canal, thus avoiding additional intake or withdrawal of

water from Crystal Bay.

31. The modifications to the circulating water system

would be addressed in a detailed engineering study. Options

would be discussed with the regulatory agencies. These options

would be designed to result in equivalent or less thermal and

biological impacts compared to the cooling system that currently

exists. The options would maintain existing thermal discharge

limits for plant cooling water and minimize impacts to aquatic

organisms. The final design of the new South Cooling Tower

would be addressed as part of the National Pollutant Discharge

Elimination System permit renewal in 2009.

32. Electricity generated at the Complex is distributed

from shared 230 kV and 500 kV switchyards on the site. The

Uprate Project will utilize these existing electrical

transmission lines. No changes to the transmission system are

required for the additional electricity that would be produced.

33. The Uprate Project will not significantly alter fuel

utilization by Unit 3. Additional enriched fuel will be used in

the unit following the Uprate Project, through increases in the

size of the refueling batches, to supply the energy to support

operation of the unit at the higher power levels.

34. The construction and operation of the uprated Unit 3

would not generate any hazardous wastes. Its construction and

operation would not cause any change in Progress Energy’s spent

fuel storage systems, which store spent nuclear fuel in onsite

facilities.

35. In 2009 (in support of the more substantial uprate

activity in 2011), Progress Energy would request that the US

Nuclear Regulatory Commission increase the licensed rated

thermal output of Unit 3 from 2609 MW thermal to 3010 MW

thermal. In a nuclear power plant, the thermal capacity is

approximately three times greater than its electrical capacity.

Therefore, the plants are often identified by both their thermal

capacity (MWt) and their electrical capability (MWe).

Uprate Project Impacts

36. Net environmental impacts associated with construction

and operation of the Uprate Project are expected to be minimal.

The principal impacts are related to the potential increase in

cooling water flow through Unit 3 following the Uprate Project’s

completion, and the potential effects of the increased

temperature of the cooling water. These effects are expected to

be offset by modifications to the circulating water system.

Construction impacts of the Uprate Project will be minimal, with

expected construction traffic volumes falling within acceptable

levels.

37. The modifications involved in the Uprate Project would

be conducted within areas already used for electrical power

generation. Therefore, there are no expected impacts to

wildlife habitat. Only common bird species typical of

urban/industrial areas have been observed within the project

area. No threatened, endangered, or plant or animal species of

special concern (listed species) are found within the project

area. Wading birds classified as species of special concern by

the Fish and Wildlife Conservation Commission occasionally

forage within wetlands outside of the project area. Gopher

tortoises have been observed outside of the project area along

the rail line on the Crystal River Energy Complex. However, no

adverse impacts to listed species are anticipated as a result of

the Uprate Project. Construction “laydown” and parking areas

associated with the separate Steam Generator Replacement Project

for Unit 3 would also be utilized for the Uprate Project in

order to avoid or minimize impacts.

38. No wetland habitat will be disturbed as a result of

the Uprate Project itself. The location of the proposed

supplemental cooling tower has not been finalized. The new

South Cooling Tower would be located to avoid and minimize

impacts to wetlands. If unavoidable wetland impacts would occur

at the site that is selected, appropriate mitigation would be

provided in accordance with a post-certification Environmental

Resource Review.

39. The Uprate Project is expected to result in an

increase in heat produced by the Unit 3 reactor. This increase

in heat would result in an increase in the heat rejected by the

Unit 3 condenser to the circulating water which is then released

to the discharge canal. The heat rejection will increase by an

estimated 768 million Btu per hour, an increase of about 13

percent over current levels. Progress Energy can accommodate

this increase in rejected heat by increasing the circulating

water flow rate through Unit 3, by increasing the temperature

rise of the circulating water from Unit 3, or by increasing

both.

40. The Unit 3 circulating water pumps may be modified to

increase their design flow rate by up to an additional 150,000

of the Unit 3 discharge water would decrease. However, if the

circulating water flow rate is not increased, the temperature of

the discharged water could increase due to the increased heat

rejection from the uprated unit. The actual operation is

expected to have results somewhere between these two extremes of

increased flow and increased temperature of the circulating

water.

41. There are four potential adverse impacts that might

result from either increasing Unit 3’s circulating water flow or

increasing the temperature of the cooling water discharge from

Unit 3. First, there could be an increase in the temperature of

the water discharged into Crystal Bay. Second, there could be

an increase in the area of offshore waters affected by the

heated water discharge. Third, there could be an increase in

the number of aquatic organisms “impinged” or trapped on the

cooling water intake screens. Fourth, there could be an

increase in the number of aquatic organisms entrained in the

intake canal and the cooling system. Entrainment refers to

passage of eggs and early larval stage organisms through the

intake canal, intake screens, and ultimately through the

circulating cooling water system. However, Progress Energy

intends to avoid or minimize these potential environmental

impacts.

42. To avoid or minimize the impacts of increased cooling

water flow and temperature, Progress Energy is evaluating a

series of modifications to the existing cooling water system,

including the installation of the South Cooling Tower. The

intake and flow modifications will be designed to reduce the

increased thermal load from the Uprate Project by removing

heated effluent from the discharge canal and to avoid or

minimize any net increase in the number of organisms being drawn

into Unit 3.

43. The proposed new South Cooling Tower would be located

between the intake canal and discharge canal, west of Units 1, 2

and 3. Detailed design and location of the South Cooling Tower

would be addressed as part of the renewal of the NPDES permit

renewal in 2009. That renewed permit would be incorporated into

the conditions of certification for Unit 3.

44. As part of potential cooling water modifications, the

South Cooling Tower could withdraw water from the discharge

canal to remove the incremental rejected heat anticipated by the

Uprate Project. The new South Cooling Tower would be designed

to dissipate the increased rejected heat from Unit 3. All or a

portion of the cooled water from the South Cooling Tower could

be returned to the discharge canal.

45. In addition to offsetting the increased water

temperature, the South Cooling Tower design could be increased

in size and provide for the return or recirculation of a portion

of the cold water from the Cooling Tower to the intake canal

instead of releasing it to the discharge canal. Recirculation

of a portion of the South Cooling Tower’s effluent back to the

intake canal could be used to maintain the intake flow in the

intake canal so as not to increase the existing intake flow rate

from Crystal Bay. This would prevent an increase in entrainment

of aquatic organisms into the intake canal.

46. Re-circulating a portion of the South Cooling Water

effluent to the intake canal should prevent any increase in

impingement associated with increased flow in the intake canal.

Although the uprate may result in an increase in through-screen

velocity, Progress Energy does not anticipate that this increase

in velocity would alter present impingement levels. If

increased impingement does occur, Progress Energy would take

further steps to avoid or minimize increased impingement.

47. Progress Energy proposes to continue to evaluate the

entrainment and impingement impacts associated with the Uprate

Project. These impacts would be addressed during the NPDES

renewal which is scheduled for submittal in 2009. The Uprate

Project is not expected to have a negative impact to aquatic

species.

48. Progress Energy currently mitigates the impacts on

aquatic organisms in the circulating water system in several

ways. It operates several helper cooling towers to reduce the

thermal discharges from these three units. It seasonally

reduces the condenser cooling water flow through Crystal River

Units 1 and 2 to reduce impingement and entrainment of aquatic

species. Pursuant to the current federal NPDES Permit, Progress

Energy also operates a multi-species mariculture facility within

the Crystal River Energy Complex. It raises several species of

important marine species, such as red drum, spotted sea trout,

and pink shrimp which are periodically released to adjacent

surface waters. Progress Energy’s mariculture operations have

contributed to the restoration of red drum and scallop fisheries

in the offshore and adjacent waters.

49. The associated circulating cooling water flow rate

through the new South Cooling Tower will increase air emission

impacts associated with increased cooling water flow in the form

of particulate matter (PM). PM emissions are the dissolved

minerals contained in the “drift” from the new cooling tower.

This is most commonly seen as the condensed water vapor plume

from a cooling tower. Other regulated air emissions, such as

nitrogen oxide (NO x ) and sulfur dioxide (SO 2 ), will not be

affected by the Uprate Project, as there will be no additional

fossil fuel combustion sources for these pollutants. The Uprate

Project will not result in an increase in greenhouse gas

emissions.

50. The South Cooling Tower requires an air construction

permit and Prevention of Significant Deterioration (“PSD”)

review and approval by the Department. The Department has

already issued a PSD permit for the new South Cooling Tower.

The term “PSD” denotes a regulatory program, established by the

U.S. Congress and implemented by the U.S. Environmental

Protection Agency (USEPA) through the states, including Florida,

that limits the amount of air quality degradation that can occur

from new or modified air emission sources. The new cooling

tower will be a modification to an existing major air emissions

source, which is the Crystal River Energy Complex. The USEPA

and the Department have implemented regulations requiring PSD

review and permitting for new or modified sources that increase

air emissions above certain threshold amounts.

51. For the proposed cooling tower, a Best Available

Control technology (BACT) analysis was conducted as part of the

PSD analysis for PM. BACT is an emission limit based on the

maximum degree of reduction of each pollutant which, on a case-

by-case basis, taking into account energy, environmental and

economic impacts, and other costs, is achievable through

available methods, systems and technologies for control of an

air pollutant. The net increase of PM exceeds the Department’s

significance emission rate and, therefore, is subject to BACT

review. Drift eliminators are the best available control

technology utilized for cooling towers. Drift eliminators are

usually incorporated into the tower design to remove as many

droplets as practicable from the air stream before exiting the

cooling tower. Highly efficient drift eliminators have been

designated for use in the proposed South Cooling Tower to

control these emissions.

52. Crystal River Unit 3 is located in an area classified

by the Department as attainment for all criteria air pollutants.

Citrus County’s air quality meets all of the federal and state

ambient air quality standards. The Chassahowitzka Wilderness

Area is the closest Class I area to the Crystal River site.

Project air emissions are not expected to have an adverse effect

on this Class I area.

53. The Uprate Project is not expected to result in any

increase in the number of employees or truck deliveries after

construction and upon operation of the uprated Unit 3. There

should be no impact on the existing transportation

infrastructure and level of service (LOS) standards as a result

of the Project. No permanent traffic capacity improvements are

necessary as a result of the Uprate Project.

54. During construction, the Uprate Project will cause

incremental increases in traffic in the Project vicinity, but

Progress Energy has agreed to implement traffic control measures

if needed.

55. A noise impact assessment was performed for the

Uprate Project, both for construction and operation impacts.

Baseline noise measurements were taken and projected noise

levels were evaluated for potential changes in noise levels.

Construction noise levels were predicted to not exceed

applicable County standards. Following completion of

construction of the Uprate Project, the Uprate Project will not

result in an increase in noise levels in the vicinity of the

plant site. The construction and operation of the uprated Unit

3 will comply with applicable Citrus County noise standards.

Land Use and Socioeconomic Effects

56. The Uprate Project would be compatible with the

existing area land uses because Unit 3 is currently in operation

and the Uprate Project will not change the existing land use of

the site or the area. In addition, there are existing power

generation units located to the west and north of Unit 3. The

Uprate Project will not have an adverse effect on nearby public

recreational or environmentally protected areas.

57. Construction and operation of the Uprate Project will

have a benefit to the local and regional economy. Construction

of the Project is in two phases. Phase 1 is anticipated to

begin in 2009 and Phase 2 in 2011. The anticipated total

workforce during peak construction activities for the Uprate

Project could total up to 650 employees in 2009 and 580

employees in 2011. The estimated cost for the Uprate Project is

$250 million for the installation and equipment upgrade

requirements. These costs are split between the two

construction phases: Phase I has an estimated $100 million in

Project costs and Phase II has an estimated $150 million in

Project costs. The major costs associated with this

construction Project include approximately $200 million for

major equipment and materials and approximately $20 million for

labor over the construction period.

58. Employment opportunities and purchases of goods and

services to support the Uprate Project are anticipated to occur

over the four-year construction period. It is expected that the

majority of the construction wages paid for the Uprate Project

construction will be spent within Citrus County and the

surrounding region. These wages will create additional demands

for goods and services. As this money is spent, it will create

a multiplier effect within the area, thereby generating economic

activity, including additional jobs and earnings.

59. Operation of Unit 3 following the Uprate Project will

result in positive impacts to the local economy. The annual

local property taxes paid by Progress Energy are expected to

increase from $8.5 million currently to $10 to 12 million after

Project completion. No increase in employment is expected as a

result of the Project, and thus, there will be no increase in

local residents. The Crystal River Energy Center is largely

self-sufficient and does not require public utilities or

services such as water and wastewater from local governments.

60. The Uprate Project would be consistent with the Citrus

County Comprehensive Plan, the Withlacoochee Regional Planning

Council’s Strategic Regional Policy Plan and the State

Comprehensive Plan.

Determination of Need

61. The Florida Public Service Commission determined that

there is a need for the Uprate Project. The Project will

displace higher-cost fossil-fuel electrical generation with low-

cost nuclear power generation, “resulting in substantial fuel

savings that provide a net benefit to customers.” Nuclear

energy is the lowest cost energy available on Progress Energy’s

system. Producing additional electricity with nuclear energy

from the Uprate Project would produce electricity at the lowest

possible fuel cost. The Uprate Project would also provide a

stable source of additional base load power. Nuclear generation

is not subject to the same supply interruptions or changes in

price volatility that can affect generation with fossil fuels,

such as natural gas. The PSC concluded that expanded energy

conservation programs cannot displace the Uprate Project.

Progress Energy is already exceeding its PSC-approved numeric

energy conservation goals.

Agency Positions and Stipulations and Conditions

62. The Department, the FFWCC, the SWFWMD, the Florida

Department of Transportation (FDOT), and the Withlacoochee

Regional Planning Council prepared written reports on the Uprate

Project, and all recommended its approval.

63. The Department found that it “has reasonable assurance

that the Uprate Project would be able to comply with applicable

agency standards and criteria as long as compliance with the

proposed conditions of certification is achieved.” The FDOT,

SWFWMD and FFWCC recommended approval of the Project subject to

their proposed conditions, which are included within the

Conditions of Certification. The Withlacoochee Regional

Planning Council found the Uprate Project to be consistent with

the Strategic Regional Policy Plan and recommended approval of

the Project.

64. The Florida Department of Community Affairs did not

prepare a report on the Project, but indicated in the Prehearing

Stipulation it does not object to the certification of the

Uprate Project.

65. No state, regional or local agency has recommended

denial of certification.

66. Conditions of Certification have been agreed to by

Progress Energy and other agencies to ensure the Project’s

compliance with state and federal regulatory standards.

Public Comments

67. The public was notified of the specific time and place

for providing comments to the Administrative Law Judge regarding

the Uprate Project. Very few members of the public attended.

Only four persons presented comments under oath. Three persons

expressed appreciation for Progress Energy’s charitable work and

services to the local communities. Another person asked for and

received information about the Uprate Project.

CONCLUSIONS OF LAW

68. The Division of Administrative Hearings has

jurisdiction of the parties to and the subject matter of this

proceeding pursuant to Chapter 403, Part II, Florida Statutes,

the Florida Electrical Power Plant Siting Act.

69. The Crystal River Unit 3 Uprate Project involves an

increase in the steam electric generating capacity of the

Crystal River Unit 3. The Power Plant Siting Act, in Section

403.506(1), Florida Statutes, provides that any increase in

steam electric generating capacity of an existing non-certified

power plant requires certification under the Sitiing Act.

Certification of the Uprate Project results in Unit 3 being

brought under the Siting Act.

70. The Florida Public Service Commission has certified

the need for the electrical generating facility to be supplied

by the Crystal River Unit 3 Uprate Project as required by

Sections 403.507(4) and 403.519, Florida Statutes.

71. In accordance with Chapter 120, the Power Plant Siting

Act, and Florida Administrative Code Chapter 62-17, notice was

given to all persons, entities and parties entitled thereto, as

well as to the general public. All necessary and required

governmental agencies participated in the certification process.

Reports and studies were issued by the Department, SWFWMD,

FFWCC, Withlacoochee Regional Planning Council, and FDOT, in

accordance with their various statutory duties.

72. Proposed Conditions of Certification have been

recommended by the Department and accepted by Progress Energy.

The Conditions of Certification incorporate by reference

existing permits that apply to Unit 3 as well as other existing

generating units at the Crystal River Energy Complex.

Applicable provisions of those separate permits that apply to

Unit 3 are made a part of the Conditions of Certification and

would become enforceable under the Siting Act.

73. The Department issued and would continue to issue

separate federally-required permits under the federal Clean

Water Act and federal Clean Air Act that apply to Unit 3 as well

as the other units at the Complex. Applicable provisions of

those federal permits that apply to Unit 3 are also incorporated

into the Conditions of Certification. A violation of any of the

permits incorporated into the Condi tions of Certification, as

they relate to Unit 3, would be subject to enforcement under the

Siting Act.

74. Competent substantial evidence presented by Progress

Energy demonstrates that Crystal River Unit 3, as modified by

the proposed Uprate Project, is entitled to certification

pursuant to Section 403.509(3), Florida Statutes. Competent

substantial evidence produced at the hearing demonstrates that

the construction and operational safeguards for Crystal River

Unit 3, as modified by the proposed Uprate Project, is

technically sufficient for the welfare and protection of the

citizens of Florida, and are reasonable and available methods to

achieve that protection. Crystal River Unit 3, with its

increased electrical output, would produce minimal adverse

effects on human health, the environment, the ecology of the

land and its wildlife, and the ecology of state waters and their

aquatic life. Crystal River Unit 3, as modified by the proposed

Uprate Project, will not conflict with the goals, objectives, or

policies of the Citrus County Comprehensive Plan.

75. If operated and maintained in accordance with this

Recommended Order and the recommended Conditions of

Certification, Crystal River Unit 3, as modified by the proposed

Uprate Project, would comply with the applicable non-procedural

requirements of all agencies. Certification of Crystal River

Unit 3, as modified by the proposed Uprate Project, would fully

balance the demand for electrical power plant location and

operation with the broad interests of the public.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that Progress Energy Florida be granted final

certification, pursuant to Chapter 403, Part II, Florida

Statutes, for Crystal River Unit 3 at the Crystal River Energy

Complex, including the addition of 180 megawatts of nuclear-

fueled electrical generating capacity through the Uprate

Project, as proposed in the Site Certification Application, and

subject to the Conditions of Certification attached to the Staff

Analysis Report of the Florida Department of Environmental

Protection, Exhibit FDEP-2.

DONE AND ENTERED this 5th day of June, 2008, in

Tallahassee, Leon County, Florida.

BRAM D. E. CANTER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of June, 2008.

ENDNOTE

1 / All references to the Florida Statutes are to the 2007

codification.

COPIES FURNISHED :

Lea Crandall, Agency Clerk

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

Tom Beason, General Counsel

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

Michael W. Sole, Secretary

Department of Environmental Protection

Douglas Building

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

James V. Antista, General Counsel

Florida Fish and Wildlife Commission

Bryant Building, Room 108

620 South Meridian Street

Tallahassee, Florida 32399-1600

Mary Anne Helton, Esquire

Florida Public Service Commission

2540 Shumard Oak Boulevard

Tallahassee, Florida 32399-0850

Kelly A. Martinson, Esquire

Department of Community Affairs

2555 Shumard Oak Boulevard

Tallahassee, Florida 32399-2100

Douglas S. Roberts, Esquire

Hopping, Green & Sams

Post Office Box 6526

Tallahassee, Florida 32314

Robert Battista, Esquire

Citrus County Attorney's Office

110 North Apopka Avenue

Inverness, Florida 33450-4231

Marti Moore, Esquire

Southwest Florida Water Management District

2379 Broad Street

Brooksville, Florida 34604-6899

Frederick E. Landt, Esquire

Post Office Box 2045

Ocala, Florida 32678

Barton Bibler

Department of Health

Environmental Engineering

4042 Bald Cypress Way

Tallahassee, Florida 32399-1742

Laura Kammerer

Bureau of Historic Preservation

R. A. Gray Building

500 South Bronough

Tallahassee, Florida 32399

Forrest Watson

Department of Agriculture &

Consumer Services

Division of Forestry

3125 Conner Boulevard

Tallahassee, Florida 32399-1650

Michael R. Moehiman

Withlacoochee Regional

Planning Council

1241 Southwest 10th Street

Ocala, Florida 34471

Kevin A. Smith

Citrus County Development Department

3600 West Sovereign Path, Suite 140

Lecanto, Florida 34461

Leon M. Biegalski, Esquire

Department of Transportation

605 Suwannee Street, Mail Stop 58

Tallahassee, Florida 32399-0450

Toni Sturtevant, Esquire

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.