Progress delays Florida nuclear project 20 months

HOUSTON, May 1 (Reuters) - Progress Energy's (PGN.N) Florida utility will delay the construction timeline for its $14 billion nuclear plant in Levy County and scale back early charges to pay for the plant, the company said on Friday.

Florida's second-largest utility said a 20-month delay in the construction schedule for two 1,105-megawatt, AP1000 reactors will push commercial operation of the first unit to 2018, rather than 2016 as currently envisioned. A second reactor at the site could begin operation about 2020.

The schedule change follows a ruling by the U.S. Nuclear Regulatory Commission that prevents certain excavation and foundation work until Progress receives a license to construct and operate the plant, the utility said in a statement.

Progress had hoped to proceed with the foundation work ahead of the issuance of a license, expected by early 2012.

An NRC spokesman said the determination was based on geologic characteristics of the Levy site.

While the Levy County nuclear station remains a "top priority," the delay may be best for customers' wallets, given the severity of the economic slowdown in Florida, said Jeff Lyash, Progress Energy Florida president.

"Shifting this portion of the work until we have the combined operating license in hand enables us to spread some of the costs over a longer period," Lyash said.

The delay may also improve the project's chances of being built.

The shift "provides time for the economy to recover, which should allow for financing in a more stable market," said Progress Energy Chief Executive Bill Johnson.