Should Consumers Pay Up Front To Build Nuclear Plants?

Should Consumers Pay Up Front To Build Nuclear Plants?

April 11, 2012

With legislative leaders rejecting possible changes, a fight is building in the Florida Supreme Court about a law that allows utilities to pass along hundreds of millions of dollars in costs to customers for nuclear-power projects.

Four lawmakers this week filed a brief in support of an effort by the Southern Alliance for Clean Energy to nix the law, which is controversial in part because customers are getting billed for projects that might never be built.

The Florida Public Service Commission recently refused to allow Gulf Power Company to recoup money for land it bought in North Escambia near McDavid for a possible future nuclear power plant. The PSC denied the request because the utility has not taken an initial step — known as getting a determination of need — for such a project.

Florida Power & Light and Progress Energy Florida — the two utilities that are definitely planning nuclear projects — have hired former Supreme Court justices to represent them in fighting the case.

Reps. Michelle Rehwinkel Vasilinda, D-Tallahassee, and Mark Pafford, D-West Palm Beach, and Sens. Mike Fasano, R-New Port Richey, and Charlie Dean, R-Inverness, filed the brief this week challenging the constitutionality of the 2006 nuclear-cost law.

Rehwinkel Vasilinda and Fasano have been outspoken critics of the law and filed bills this year to try to repeal it, but the bills were not heard in legislative committees. The brief argues that the law unconstitutionally gives too much power to the Florida Public Service Commission to decide whether to approve the nuclear costs.

"The … process has become little more than a pro forma session allowing the PSC to agree to the utilities' requests for more funds," the brief says. "The process amounts to issuing a blank check to (Progress and FPL) allowing them to remain in a perpetual state of preconstruction."

Legislative leaders have stood behind the law, arguing that utilities need to be able to collect money to offset at least parts of the upfront costs of the multibillion-dollar projects.

During a Fasano-prompted discussion in February, Senate Communications, Energy and Public Utilities Chairman Andy Gardiner, R-Orlando, said customers likely would wind up paying more if the utilities waited to recoup costs until after the plants start operating.

"If we believe in diversifying electricity in this state, there has to be options," Gardiner said at the time.

Progress plans to build two nuclear reactors in Levy County, while FPL has moved forward with a similar project in Miami-Dade County. Neither site would start producing electricity for at least another decade and are not guaranteed to ever be built.

Each year, the utilities go before the PSC with proposals to recover costs from customers. The commission has approved allowing Progress to collect $86 million from customers this year and FPL to collect $196 million — though much of the FPL money will go toward upgrading current nuclear plants instead of the planned project.

By The News Service Florida