Fla. senators eye changes in nuclear utility rates
TALLAHASSEE, Fla. (AP) — Four Republican state senators Thursday announced plans to seek changes in a Florida law that lets utilities charge customers for future nuclear power plant construction even if it never gets built.
A House member sponsoring repeal legislation, though, said the Tampa Bay area lawmakers' proposal won't work because it doesn't go far enough and utilities will find a way around their revisions.
Sen. John Legg, R-Lutz, said the legislation's intent is to protect consumers' interests, assure accountability and transparency and responsibly plan for Florida's long-term energy needs.
"On the details, there is plenty of room for conversation," Legg said at a news conference. "But on these three principles there will be no room for compromise."
Legg's bill, which hasn't yet been filed, would set a deadline for construction to begin and eliminate the profit utilities can make on customers' prepayments if they fail to build a plant. Another provision would reduce interest utilities now earn on carrying costs on their projected construction cost balances from a current 8.5 percent to an annual market rate, said Sen. Jack Latvala, R-Clearwater.
"This is merely a Band-Aid or even could be a whitewash — telling consumers that they've done something and not doing anything, really," said Rep. Michelle Rehwinkel Vasilinda. The Tallahassee Democrat is sponsoring a bill that would repeal the 2006 nuclear cost recovery law. "This half-measure just doesn't move us forward."
Rehwinkel Vasilinda advocates conservation and renewable energy as alternatives to nuclear power. She said the Senate legislation appears to be aimed at heading off a repeal vote. Legg denied that.
Utilities normally cannot begin billing customers for the construction costs or upgrades until generating facilities go into service. The 2006 law makes an exception to that policy for nuclear power.
It was designed to encourage more nuclear plants, which are riskier and much more expensive to build, to reduce the state's reliance on fossil fuels such as coal and natural gas that cost more and contribute to air pollution and climate change.
Latvala, though, said "times have changed." He noted gas prices have fallen since 2006 along with the need for new generating capacity because Florida's population growth has slowed due to hard economic times.
The senators' proposal also drew criticism from Florida Power & Light Co. The state's largest electric utility, FPL serves 4.6 million homes, businesses and other customers in South Florida and on the state's east coast.
The Juno Beach-based company issued a statement opposing any changes to the current law, contending it'll save consumers billions in the long run on fuel costs while creating thousands of jobs and helping Florida's economy.
"Those benefits aren't theoretical — they are real and happening now," the statement says.
FPL spokesman Mark Bubriski said in an email that FPL recently completed nuclear plant upgrades financed by the cost recovery clause, which are saving customers $7.5 million a month in fuel expenses. The typical residential customer using 1,000 kilowatt hours per month currently pays a $1.65 nuclear cost recovery fee.
A spokesman for Progress Energy Florida, which has 1.6 million customers in central and north Florida, did not immediate respond to a telephone message seeking comment.
Progress, recently purchased by North Carolina-based Duke Energy, has been charging nuclear cost recovery fees for upgrades to an existing plant at Crystal River and a new one planned for nearby Levy County.
Duke, though, has decided to close the damaged Crystal River facility, but the utility stands to earn a $50 million profit on the $500 million customers already have paid. Customers also have paid $1.5 billion for the Levy plant. Duke could earn $150 million if that project is not built.
The Senate plan drew measured praise from the Southern Alliance for Clean Energy, a group that also advocates conservation and renewable power.
The group's lobbyist, Susan Glickman, commended the senators for taking on the issue and predicted once they examine the costs they'll "figure out that we really don't need this kind of nuclear power going forward."
Latvala will be co-sponsoring Legg's bill along with Sens. Jeff Brandes, R-St. Petersburg, and Wilton Simpson, R-New Port Richey.