Nuclear cost recovery law shifts risk to customers, critic says, as legislation remains in question

Nuclear cost recovery law shifts risk to customers, critic says, as legislation remains in question

Bruce Ritchie, 03/27/2013 - 11:23 AM

A 2006 law that allows utilities to charge customers for nuclear plants that may never be built
actually shifts the risk to utility customers and away from investors and stockholders, a former U.S.
Nuclear Regulatory Commission member has told a House panel.

House Speaker Will Weatherford has said he supports reviewing the 2006 nuclear cost
recovery law, which has allowed utilities to recover nearly $1.4 billion. In the Senate, SB 1472
would set a 2016 deadline for collecting nuclear costs unless the Legislature votes to extend the
law.

Rep. Jose Felix Diaz, chairman of the House Energy & Utilities Subcommittee, said the
panel could introduce a committee bill next week -- unless the meeting Wednesday was its last for
the legislative session.

"I think this issue has become radioactive, pardon the pun, for a lot of folks," said Diaz, R-Miami,
who was appointed chairman last week after the death of Rep. Clay Ford, R-Gulf Breeze.

"A lot of our members are clearly very interested in this issue," Diaz said. "It's just a matter of
timing."

Last week, the Senate energy committee heard from nuclear cost recovery law supporters from
the Nuclear Energy Institute, Florida Power & Light Co. and Progress Energy Florida.
Paul Geneo, senior director of policy development for the Nuclear Energy Institute, said the 2006
legislation was a model for the nation and is still needed.

Florida's law could be improved, Bradford said, by capping the amount that can be recovered from
customers or not allowing recovery until the plants are underway and perhaps 50 percent
completed.

He also said that Florida needs a more rigorous comparison test to determine whether a new
nuclear plant is feasible compared to other sources of energy. And the law needs to avoid punishing
the utility or customers if there is a decision to cancel a project.

"The worst thing a statute can do is create situations where the interest of utility stockholders point
in one direction while the interest of utility customers points in the other," he said.

The Legislature in 2006 adopted the law after hurricanes that threatened and disrupted natural gas
supplies to Florida, pointing to the need for fuel diversity, said Steven Scroggs, senior director for
nuclear development at FP&L.

The company is a few weeks away from adding 500 megawatts of new generation through upgrades
at nuclear plants in Miami-Dade and St. Lucie counties, Scroggs said. Those projects cost the utility
$2.9 billion but only $320 million was raised through cost recovery.

Alex Glenn, state president of Progress Energy Florida, again said he rejects the suggestion that
utilities are being provided a "blank check" under the law.

He also noted that Bradford was a witness against his company before the Public Service
Commission in rate case challenges filed by the Southern Alliance for Clean Energy.

"I think he has an issue with what the outcome of those decisions were," Glenn said.