PSC moves forward with nuclear hearing following Levy County project's cancellation

PSC moves forward with nuclear hearing following Levy County
project's cancellation
Bruce Ritchie, 08/05/2013 - 05:08 PM

The Public Service Commission on Monday
deferred action on Duke Energy Florida after
the company filed an agreement that calls for
cancelling its proposed nuclear plant in Levy
County.

The PSC began a scheduled weeklong hearing for
Florida Power & Light Co.'s request for
nuclear cost recovery. Florida law since 2006 has
allowed utilities to charge customers for nuclear
power plants that may never be built. The
Legislature in May passed SB 1472, which places
some restrictions on costs that can be recovered and lowers the rate of return for utilities.

Duke Energy Florida announced Aug. 1 that it had reached a settlement agreement with the
Office of Public Counsel and other challengers. The agreement included canceling the project
although it plans to continue seeking a federal license for the plant.

The company said federal licensing delays and SB 1472 contributed to the decision to cancel the
project.

SB 1472, signed by Gov. Rick Scott on June 14, limits nuclear cost recovery to those costs
related to applying for a federal license. The bill also requires PSC approval to begin
pre-construction and construction phases, according to a PSC analysis.

Duke Energy Florida is seeking $174.6 million for the proposed new nuclear plant in Levy County
and for work on the botched upgrade of its Crystal River plant. The Public Service Commission
will reschedule a hearing on the request.

Last week, Sen. John Legg, R-Lutz and sponsor of SB 1472, disputed Duke's claim that the
legislation was a factor in the decision to cancel the plant.

Sterling Ivey, company spokesman, said Monday the increased reviews by the PSC were a
concern.

"As you know we didn't support any changes to the legislation," Ivey said. "But the increased
prudence reviews before the Public Service Commission creates some uncertainty for our
company in investing in that site."

Susan Glickman, representing the Southern Alliance for Clean Energy, said Monday that
she thinks the legislation would have led to a more rigorous review of the company's request by
the Public Service Commission.

"They could have stopped the plants a long time ago but they didn't," Glickman said. "But the
attention paid to the issue in the Legislature sent a message to the Public Service Commission that
they need to be more concerned about these costs."

PSC members Lisa Edgar, Ronald A. Brise and Art
Graham listen to a Florida Power & Light Co. official
during a hearing Monday on nuclear cost recovery.
Photo by Bruce Ritchie.

Her group challenged the 2006 law before the Florida Supreme Court. In May, the court dismissed the group's claim that the law was vague and unconstitutional.

FPL is requesting $28.2 million in costs associated with proposed new nuclear units at its Turkey Point power plant in Dade County along with upgrades of plants there and in St. Lucie County.

During the hearing on Monday, Southern Alliance for Clean Energy attorney George Cavros pressed FPL's Steven R. Sim, senior manager of integrated resource planning, to explain how FPL's analysis leads it to believe that a new nuclear plant in Dade County remains feasible when Duke decided the Levy County plant is not.

"What's true for one utility system is not necessarily the same for another utility system," Sim said.

A decision on whether the law changes dealing with rate of return on capital investments applies to the utilities was put off by the Duke settlement agreement and another with FPL in which the utility agreed to reduce its request by $1.6 million to match a reduced rate of return on the projects allowed by SB 1472.

"They are giving up on the money," Public Counsel J. R. Kelly said. "They agreed to our position without agreeing that the law applies."

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