Power industry defends charges for plants that might not be built

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Legislation is in the pipeline to reverse a 2006 law that has allowed more than $800 million to be collected towards the construction of nuclear power plants that may never get built, reports Jim Turner of the News Service of Florida.

But industry leaders and representatives for the state’s largest utilities on Monday praised the law, which they say has allowed them to be ready for increased demand.

Florida Power & Light Senior Director of Nuclear Development Steven Scroggs said the 2006 law has allowed the Juno Beach-based utility to acquire advantageous financing rates on projects while planning for new nuclear facilities. It can take more than six years to land federal permits and take a decade before construction begins, he said.

“We don’t really have the luxury of sitting by idly, we have to plan ahead,” Scroggs said. “Just as if we know hurricanes and tornadoes are coming we position crews in position to be able to respond quickly as soon as that weather has passed, similarly we cannot wait to make decisions about new generation investment until our customers need additional power. We have an obligation to plan far in advance.”

The law has allowed FPL to upgrade already-existing nuclear plants in Miami-Dade and St. Lucie counties, while planning for the possible construction of two new reactors.

Alex Glenn, Florida President of Progress Energy Florida, which recently merged with Charlotte, N.C. -based Duke Energy, told members of the Senate Communications, Energy and Public Utilities Committee he is “optimistic” the company will get a federal license to move forward with plans for nuclear plants, but even then the company must continually re-evaluate the costs of construction materials, the potential of carbon taxes, and other fuels before building.

The presentations came as Sens. Jeff Brandes, R-St. Petersburg, Jack Latvala, R-Clearwater, John Legg, R-Lutz, and Wilton Simpson, R-New Port Richey, have proposed a measure (SB 1472) to change the 2006 law and require the power companies to return any money collected if the plans for the plant are shut down.
Legg on Monday told committee members that they need to determine how long the state should give the utilities to move forward with the plant plans, how much they should be allowed to collect and asked whether customers are not the victims of a “shell game.” 

“I believe nuclear power plays a role (in Florida’s energy master plan), it plays a vital role, however, a blank checkbook for a product that may not exist is very hard to swallow and I don’t think is fair to our consumers,” said Legg, who supported the law as a member of the House in 2006.

Progress’ Glenn disagreed that the utilities receive a “blank check.”

“We don’t plan for the next year — yeah we do to keep the lights on — but we look at the next five, the next 10, the next 20, the next 60 years, that’s the business we’re in,” Glenn said. 

“So we look for growth,” Glenn added. “We look for reliability, cost, effectiveness, and energy security. We only have two pipelines coming into this state, one goes under the Gulf and one goes overland in Georgia and Alabama and that’s it.”

Nuclear Energy Institute Senior Director Paul Genoa also defended the 2006 law, saying the legislation has been emulated in other states, which allows the utilities to make long term decisions to benefit consumers and has allowed plants to be constructed in Georgia and South Carolina.

“In our view, it was good public policy in 2006 and remains good public policy today,” Genoa said.

House Speaker Will Weatherford has said that as the state’s energy demands have changed, notably the downward cost of natural gas which is expected to account for 60 percent of Florida’s energy source, he was open to revisiting the law.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.