Lessons for Diablo Canyon: Florida county turns to manatees, taxes after nuclear plant’s closure

A manatee and her calf lounge in western Florida’s Crystal River. The city has turned to the animals as a tourist attraction as it looks to boost its economic base following the closure of the Crystal River Nuclear Plant.
A manatee and her calf lounge in western Florida’s Crystal River. The city has turned to the animals as a tourist attraction as it looks to boost its economic base following the closure of the Crystal River Nuclear Plant. Los Angeles Times

Editor’s note: Diablo Canyon’s closure in 2025 means an annual economic loss of about $1 billion locally. This is the second of a four-part series on how other communities dealt with the financial consequences when their nuclear power plants closed.

Citrus County, Florida, was struggling to dig itself out of the Great Recession when its battered economy took another hit: On Feb. 5, 2013, Duke Energy announced it would permanently close its Crystal River Nuclear Plant.

For decades, the 860-megawatt plant had made Duke the undisputed economic powerhouse in Citrus, a county of about 140,000 located on Florida’s Gulf Coast. No other company came even close.

Duke was the biggest taxpayer and the No. 1 supplier of jobs — there were 600 employees just on the nuclear plant’s payroll, not counting security workers and private contractors. And these weren’t just any jobs; Duke employees were highly paid — industrywide, the average annual salary is over $100,000 — making it possible for them to buy new cars, remodel their homes and frequent local shops and restaurants.

Loss of tax revenue from the plant, coupled with the lingering housing foreclosure crisis, left the government of Citrus County near bankruptcy. It survived by raising property taxes 31 percent and by laying off approximately 100 government workers, Citrus County Administrator Randy Oliver said.

Costly repairs

CR3, as the plant is known, had a troubled history. It began operating in 1977 but had been offline since 2009 after a previous owner’s botched effort to replace steam generators left cracks in the containment building. A fix would have cost between $2.5 billion and $3.4 billion, but even so, the community hoped Duke would repair the plant and seek a license extension allowing it to operate until 2036.

Announcement of the shutdown — while not totally unexpected — hit residents hard.

“I think everybody took it as a given that it would be around forever,” Oliver said.

Duke Energy isn’t gone; it still operates coal-fired plants in Citrus County, but it’s no longer the economic engine it once was. It’s dropped from first to seventh-largest employer, and though the county budget shows it’s still the biggest taxpayer, instead of generating 35 percent of property tax revenue, its share has fallen to 15 percent.

Manatee rescue?

Following the closure announcement, some in Crystal River looked to endangered manatees to keep them afloat.

The popular sea cows, as they’re sometimes called, have long been a celebrated attraction in Crystal River, even before the plant shut down. There’s an annual manatee festival, a statue of a manatee is prominently displayed in front of City Hall, and the community is widely touted as the only place in the nation where visitors can swim with the animals. As a result, more than 300,000 visitors per year have been coming to Crystal River.

“We’re an international destination, mainly because of our manatees,” said Crystal River Mayor Jim Farley.

Since CR3 closed, the city has been trying to capitalize even more on tourism; it’s moving forward with a Riverwalk project that will include a pedestrian boardwalk and hiking trails. The project is partially funded with $500,000 from BP’s settlement of its 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico.

“It’s something that’s been talked about and talked about for decades,” Farley said of Riverwalk. “We’re making it a reality.”

While he’s upbeat about the city’s prospects, the mayor acknowledges CR3’s closure was a major financial blow.

“They were the biggest employer in the county,” he said. “Second to that would be the hospitals.”

Statistics show just how much the loss affected the economy. According to a business column published last fall in the Tampa Bay Times, the region saw its gross domestic product decline by 7.5 percent in 2014. That was the biggest loss among the 382 metro areas included in the U.S. Commerce Department report.

“Only now are we starting to realize the profound economic impact of losing a nuclear power plant before its time,” business columnist Robert Trigaux wrote at the time.

From nuclear to natural gas

Efforts to attract new industry to the region have had mixed results.

The largest industrial development to break ground since CR3’s shutdown is another Duke Energy project. Duke is building a natural gas plant at its Crystal River Energy Complex, where the shuttered nuclear facility is located. Duke also operates four coal-fired plants there, though two of those are scheduled to shut down in 2018 when the new gas plant goes online.

The $1.5 billion gas plant is expected to provide 600 to 700 temporary construction jobs and 50 to 75 permanent jobs once it’s online. The plant will generate an estimated $4.1 million in annual property tax revenue when operations begin, according to Duke Energy communications manager Heather Danenhower.

But with two of the coal-fired plants going offline when the plant opens, Oliver, the county administrator, suspects there may be little overall property tax gain.

Duke says it’s too soon to speculate. “The analysis is on our radar,” said Danenhower, “but too many factors are currently unknown, and speculating wouldn’t be prudent.”

More efforts to rebound

Soon after CR3’s fate was announced, the Citrus County Economic Development Council commissioned a team of out-of-state consultants to prepare a five-year economic development plan focusing on diversifying the region’s economy.

The 32-page report released in 2013 covered several areas, including tourism, marketing and workforce development, though it concentrated on attracting new industries. Among other suggestions, it advised developing business parks with all necessary infrastructure — highways, water and sewer connections, telecommunications — and offering incentives to landowners willing to improve their industrial properties to attract new employers.

Officials say the plan — which would have cost $2.4 million to fully implement — has yet to pan out.

“It’s easier to say this is a great idea than to make this happen,” said Farley.

To his knowledge, there have been no efforts to pursue the report’s key recommendations, such as developing new, move-in-ready business parks.

Public officials like Farley are looking in a different direction for help: Washington, D.C.

They’ve been closely following a bill recently introduced by Republican Congressman Bob Dold of Illinois, whose district includes the shuttered Zion nuclear power plant. The Stranded Waste Accountability Act would compensate communities serving as de facto storage sites for spent nuclear fuel.

Funds would be allocated according to the amount of waste stored; Crystal River would be entitled to nearly $9 million per year.

While the bill is in its infancy, officials already are laying claim to their share of the proceeds. County commissioners recently proposed splitting the windfall between the county and Citrus County school district, according to the Citrus County Chronicle. That triggered pushback from the city of Crystal River.

“Council members wondered why Crystal River would not be the primary recipient of the funds due to the deactivated reactor — now part of Duke Energy’s Crystal River Energy Complex — bearing the city’s name,” the Citrus County Chronicle reported.

Citrus County today

There are signs Citrus County’s economy is recovering.

The unemployment rate, almost 12 percent in July 2012, was 6.8 percent in June, though that’s still higher than the statewide rate of 4.7 percent and tied for the second highest in the state.

A $200 million, state-funded highway project, Suncoast Parkway 2, is expected to further jumpstart the economy. The highway will provide a quicker, easier connection between Citrus County and Tampa, located about 90 miles away. That should make Citrus more attractive to employers and families looking to settle in a smaller community with a laid-back lifestyle, Oliver said.

Residents, though, aren’t convinced the economic damage done by the combination of the recession and the closing of CR3 is behind them.

“Just looking around, the economy has not rebounded as much as you sometimes hear on the news,” said Ruth Draper, a retired major with the Salvation Army.

Draper ticks off names of half-a-dozen restaurants where she used to eat that are now closed.

“Every time we go somewhere we say, ‘Oh, there’s another door closed.’ 

Blueprint for recovery

Suggestions included in a five-year strategic plan for Citrus County’s economic recovery, released in 2013:

  • Offer property owners tax breaks to rehabilitate or clean up their industrial parcels.
  • Develop a better campaign to market the county as “an outstanding location for business.”
  • Investigate the feasibility of a multiyear capital campaign to support Economic Development Council operations.
  • Start a business retention program; call on employers at least once a year to discuss any problems that might lead them to relocate.
  • Develop a “buy local” agriculture campaign.
  • Recruit companies in marine trades and outdoor recreation.
  • Organize and assist efforts to recruit “high net worth retirees.”
  • Develop a customer service certification program; sponsor an Employee of the Month program.
  • Work with schools on a curriculum emphasizing “soft skills” for the workforce such as punctuality, teamwork and problem-solving.
  • Create an Ambassadors Program to promote Citrus County; ambassadors would be given talking points, data and “elevator speeches.”
  • Meet regularly with Duke Energy to discuss potential new projects.

By the numbers

Property tax generated by Crystal River Nuclear Plant:

2012: $6.1 million

2013: $5 million

2014: $1.4 million

2015: $373,691

Snapshot of Citrus County, Florida

Population: 141,058

Median household income: $38,109

Individuals below poverty level: 17.3 %

Percent without health insurance: 14.6 %

Median housing value: $113,500

Total housing units: 77,875

Number of companies: 9,705

Source: U.S. Census Bureau

The 4-day series at

a glance

Day 1: In Vermont, financial aid includes $10 million for economic development

Day 2: Citrus County, Florida, looks to tourism and tax increases to get back on economic track

Day 3: Carlton, Wisconsin, is sued after assessing shuttered power plant $457 million

Day 4: Should communities get federal financial incentives when nuclear plants close?