Title
Settlement Agreement between Duke Energy Florida, Inc. (Duke) and the City of Gainesville d/b/a Gainesville Regional Utilities (GRU) for the settlement, release, and acquisition agreement regarding ownership interest in Crystal River Unit 3 (CR3)
Explanation
In 1975, GRU became one of eight minority Owners (“Minority Owners”) in Duke’s Crystal River Unit 3 nuclear power plant and has an ownership interest of 1.4079 percent. In addition to having an ownership interest in CR3, GRU was also a wholesale purchaser (“Wholesale Purchaser”) with a five-year Purchase Power Agreement for 50 MW of a blend of system average power from Duke that expired December 31, 2013.
In February 2013, Duke announced its intention to retire CR3 prior to the license expiration in 2016. The eight municipal Minority Owners and seven Wholesale Purchasers selected the Florida Municipal Power Agency (FMPA) to negotiate on their behalf with Duke concerning the failed CR3 plant.
On August 1, 2013 the City Commission voted to (1) authorize the General Manager, or his designee, to pay FMPA up to a total of $110,000 for FMPA’s efforts on GRU’s behalf, inclusive of all amounts already incurred and paid by GRU for the CR3 negotiations with Duke; and (2) authorize the General Manager, or his designee, to execute the Authorization for Increased FMPA Costs and Expenses, agreeing to pay up to $110,000 to FMPA on GRU’s behalf.
After more than a year of negotiations with Duke, the eight municipal minority owners and the seven Wholesale Purchasers have reached a settlement. The resulting settlement is structured as a global settlement agreement intended to resolve all disputes between the Minority Owners, Wholesale Purchasers and Duke in regard to CR3. Each of the Minority Owners and Wholesale Purchasers are seeking approval and execution of the agreement in June 2014.
Fiscal Note
Pursuant to the Settlement Agreement, the terms provide for the following: (1) $55,000,000 lump sum cash settleme...
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