PSC hearing set on revised Duke Energy nuclear settlement

PSC hearing set on revised Duke Energy nuclear settlement
Bruce Ritchie, 10/15/2013 - 05:13 PM

A hearing on a proposed revised settlement involving Duke Energy Florida Inc.'s nuclear
projects will be considered by the Public Service Commission at a hearing on Wednesday.

Duke announced Aug. 1 it was canceling a proposed new nuclear plant in Levy County. In
February, it announced it would close its Crystal River nuclear plant after botched repairs in 2009
led to its shutdown.

The Office of Public Counsel says the settlement, revised with the cancelation of the Levy
County plant, will provide $388 million in refunds to customers while reducing or denying more
than $1 billion in returns on costs for Duke investors.

"I agree with the decision we negotiated to shut (the Levy plant) it down," Public Counsel J. R.
Kelly said. "I do believe the cost of that (expected) project the project costs have now become so
astronomical that it would have been untenable for the ratepayers to pay that kind of money."

He said a finding that Duke Energy's costs were prudent would have meant that it could recover
all of those costs, not a portion of them as provided by the settlement.

But Tampa Bay Times staff writer Ivan Penn argued in an Oct. 13 column that the settlement
leaves customers on the hook for costs while letting the company off, without having to explain its
actions related to Crystal River repairs or the proposed Levy County plant.

"Duke will not have to defend forcing its customers to pay the better part of $3 billion in return for
not even a single kilowatt of nuclear power, nor why it should get to keep the $250 million it made
on the two nuclear projects," Penn wrote.

Amid concerns about reliability and price fluctuations for natural gas, the Legislature in 2006
passed a law that allows utilities to charge customers for nuclear power projects regardless of
whether they are ever built.

SB 1472, passed by the Legislature in May and signed by the governor in June, denies cost
recovery 20 years after a federal nuclear plant license was obtained. Bills to repeal the 2006 law
have not been heard.

Duke Energy spokesman Sterling Ivey said the PSC has not found costs requested by the utility
to not be prudent as required by law.

"The agreement represents an effective balance between moderating rate impacts to customers
and providing clarity on cost recovery of past investments, which allows Duke Energy to move
forward with planning Florida's energy future," Ivey said in an email.

Jon Moyle, an attorney representing the Florida Industrial Power Users Group, said the
proposed settlement is a product of extensive negotiations on a number of complex issues and
provides certainty whereas the outcome before the PSC would not have been.

"Sometimes thats the hallmark of a decent settlement when everyone feels like they walked away
not getting everything but enough to make it work for their clients," he said. "I think that
accurately characterizes this deal."

The Southern Alliance for Clean Energy is expected to speak in support of canceling the Levy County project, said George Cavros, an attorney in Florida for the group based in Knoxville, Tenn.

The group supports lower cost, lower risk energy sources and energy conservation and wants the 2006 law repealed, he said. HB 4001 by Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, would repeal the law.

Reporter Bruce Ritchie can be reached at britchie@thefloridacurrent.com.