Jacksonville, Fla., municipal utility JEA last week signed an agreement with Duke Energy that gives it the option to buy up to 20% of the power generated by Duke Energy’s planned 2,234-MW Lee Nuclear Station when it becomes operational in 2021.

The municipality signed a $7.5 million option to spend about $2 billion for 400 MW of annual capacity. The company said the $2 billion estimate on the price is based on current projections for Lee’s cost, and it could be renegotiated.

But before the option takes effect, Duke must obtain a combined construction and operating license from the Nuclear Regulatory Commission (NRC) and sign engineering and construction contracts and other agreements. Duke has yet to file for permission to build the plant with South Carolina regulators.

JEA will have 90 days following the NRC’s approval—expected in 2013—of the $11 billion nuclear plant to decide whether it will exercise the purchase option. Duke has indicated that the plant could feature two AP1000 Westinghouse reactors.

Sources: JEA, Duke