This blog was written by Sara Barczak, former Regional Advocacy Director with the Southern Alliance for Clean Energy.
Guest Blog | August 7, 2013 | Energy Policy, Nuclear
Over this past week, the news in Florida has been all nuclear, all the time. And another headline for this blog could be, “Another one bites the dust” as the much-touted, so-called “nuclear renaissance” continues to crumble in the state.
Just last February, Duke wisely announced that they would not pursue further repairs to the Humpty Dumpty Crystal River 3 reactor after Progress botched the job starting back in 2009, spending billions in the process. Then in May, the Florida State Legislature passed a modest bill, SB1472, that attempted to fix some of the many wrongs in a statute that allows utility customers to be charged in advance for the construction costs for new nuclear reactors. Now the big “new” nuclear news in Florida began last Thursday with the major announcement by Duke Energy Florida (DEF) that they are canceling the $25 billion-and-climbing new Toshiba-Westinghouse AP1000 two-reactor proposal in Levy County.
The perpetually plagued Levy Co. reactor proposal experienced skyrocketing costs and was nearly a decade delayed on its in-service dates. Like Crystal River 3, Duke inherited this misguided proposal from the recent merger with Progress Energy. SACE issued a media statement and held a media teleconference expressing our support of this long-overdue cancellation decision by Duke, but noted serious concerns about the impacts this will have on Florida ratepayers.
And we were not alone in expressing our dismay; many others in the news world and the political arena weighed in as well. Several reactions included shock and disgust at the appalling situation that has befallen Floridians because of years of many bad decisions by a wide range of players from the State Legislature to the Public Service Commission to the big power companies themselves.
Robert Trigaux, business columnist with the Tampa Bay Times, issued one of the most scathing accounts of this nuclear boondoggle. Here’s a short blurb (but we encourage you to read it in full, preferably aloud, in order to get the full effect):
“Hey, elected clowns! Thanks for passing a law forcing Duke Energy customers to pay up to $1.5 billion in higher rates for a long proposed nuclear power plant in Levy County that will not be built.
And no, Florida customers, you’re not getting any of that money back.
The good news is that on Thursday Duke Energy finally ended the charade that Levy would ever open. The meter has finally stopped, though customers will be paying down the tab for years. …
If charging people in advance for private sector projects like nuclear power plants is such a clever, money-saving idea, why has it not caught fire as a way to finance any big, long-term project?
Because it is bogus. Because only monopolies, like electric utilities, can get away with such self-serving shams. Because private sector competition should decide what projects deserve to win or lose financial backing.”
The Tampa Bay Times has tracked this debacle steadfastly for years, and Ivan Penn’s coverage has been instrumental in documenting the nuclear foibles that have plagued Progress (now Duke) ratepayers. As he reported:
“As it turns out, they were all wrong. Progress Energy insisted its proposed nuclear power plant in Levy County would provide low-cost energy for generations.
The Legislature promised again and again that a new law forcing customers to pay in advance for the Levy project would get the plant built faster and cheaper, even as the delays piled up and the price soared.
On Thursday, the big talk ended. Duke Energy, Progress’ successor company, pulled the plug on Levy. There will be no cheap power.”
The Miami Herald weighed in given that Florida Power & Light (FPL) is still plowing ahead with their two-reactor proposal at the existing Turkey Point plant near Miami. That proposal has also experienced cost increases and delays. FPL won’t commit to a price for the project, and hasn’t even committed to constructing the reactors. Meanwhile, they continue to pursue a license from the U.S. Nuclear Regulatory Commission and recovering its costs from customers. Given the cancellation of the Levy project, and that FPL won’t commit to a price or even the construction of the reactors, we ask FPL — why don’t your shareholders cover the costs to spare your customers from more damage?
State Rep. Mike Fasano, formerly a state senator who originally supported the anti-consumer state legislation back in 2006 that allows utilities to pick the pockets of their customers in advance for these risky reactor projects, has been a champion for years now fighting to repeal Florida’s “nuclear tax” as it is often referred to. Fasano commented on the news of the Levy cancellation to the Time’s Penn and was not shy about his feelings:
“Shame on Duke Energy, Progress Energy for taking the public on this ride knowing that they were never going to build the nuclear plants. Shame on them.“
He was joined in disgust by State Rep. Dwight Dudley who has been a strong voice opposing the unjust Florida “nuclear tax” and commented in the same article:
“I don’t give a damn how they justify taking our money. … This isn’t over yet. We’ve still got work to do.”
Thankfully the passage of SB1472 earlier this year, as Bruce Ritchie pointed out in the Florida Current, has caused some hesitation for the utilities.
Then the nuclear news in Florida got even more interesting (and complicated) earlier this week when the hearings on the 2013 nuclear cost recovery clause docket began before the Florida Public Service Commission (PSC). Duke didn’t have much to say before the Commission other than to ask that the PSC defer consideration of Duke’s issues until next year pending approval of a settlement agreement that cancels the Levy project. A hearing to consider approval of the settlement agreement will likely take place in October. So, the the hearing essentially turned into the “SACE and FPL Show.” Since SACE didn’t agree to a stipulation offered by FPL to simply brief the issues, a hearing was held in which FPL witnesses were questioned about the feasibility and cost of the proposed new Turkey Point reactors, and the uprate projects at St. Lucie and Turkey Point — which experienced mega-cost overruns. The Miami Herald covered FPL’s numbers game well:
“Five years and more than $650 million into refurbishing and building nuclear reactors, Florida Power & Light officials told regulators Monday that it can’t guarantee what new reactors will cost consumers, when the reactors will deliver energy, or even if it will get a license to finish the job.”
The Herald’s Naked Politics blog followed the day’s hearing, and captured SACE’s frustration with the PSC’s continued failure to scrutinize the projects for feasibility and protect the interests of consumers:
“George Cavros, attorney for the Southern Alliance for Clean Energy, put the blame on both legislators and the PSC for the failed projects. Consumers ‘paid a whole of money for a whole lot of nothing,’ he said. ‘We believe that was facilitated by law and, quite frankly, also by you by approving certain costs for recovery for a project that was increasingly speculative.'”
So what lies ahead? How about another appropriate reference to another hit by Queen, “Under Pressure.” This is fitting not only for the utilities who have to explain themselves to their rightfully outraged customers, but to the PSC Commissioners who are set to vote in October on a settlement agreement that cleans up the financial fiasco that took place under their watch and state lawmakers who failed to ultimately repeal the legislation that started this whole mess.