Jim Saunders of the News Service of Florida reports Progress Energy Florida faced two key questions Tuesday as it asked regulators to approve passing along about $140 million in nuclear costs to customers: Will it ever build two reactors in Levy County? And if so, when?
Attorneys for consumers and business and environmental groups repeatedly tried to cast doubt about the company meeting 2021 and 2022 target dates for the project.
As a result, they contended that the Florida Public Service Commission should only approve part of Progress’ nuclear-cost request for next year.
“We ask you to make 2012 a time when customers get a little bit of a break,” said state Deputy Public Counsel Charles Rehwinkel, whose office represents consumers in utility cases.
But Progress attorneys and executives said the company plans to start operating the first Levy reactor in 2021 and the second reactor 18 months later. Attorney John Burnett accused the critics of offering “sound bites” but lacking proof that the project will be scuttled or delayed.
“This is where the credible evidence ends and the distractions begin,” Burnett said.
The PSC, which held an all-day hearing, is expected to decide in October whether to grant Progress’ proposal to collect the money from customers. Almost all of the money — $135 million — would be used for early expenses for the Levy County project, while a small amount would help cover costs at an already-existing Crystal River plant.
Hoping to encourage additional nuclear power, Florida lawmakers in 2006 approved allowing utilities to incrementally pass along project costs to customers rather than waiting until nuclear plants start operating. Those costs are in addition to routine expenses, such as base rates and fuel charges, that show up in customers’ monthly bills.
Florida Power & Light also went before the PSC last week with a request to collect $196 million in nuclear costs from customers in 2012. In contrast to Progress, most of the FPL money would go toward upgrading existing nuclear plants in St. Lucie and Miami-Dade counties.
If the PSC approves Progress’ request, residential customers in 2012 would pay $4.65 a month for 1,000 kilowatt hours to cover the costs. Many residential customers use more than 1,000 kilowatt hours, though that is a common measurement in the utility industry.
Currently, Progress customers pay $5.53 a month for 1,000 kilowatt hours to cover nuclear costs.
If built as planned, the Levy County project would be Florida’s first new nuclear plant since an FPL reactor in St. Lucie County started operating in 1983. In all, the Levy County project is estimated to cost about $22.5 billion.
While critics point to concerns about the effects on ratepayers, Progress argues the Levy County reactors ultimately would help hold down future electricity costs. That is because more nuclear power would reduce the company’s reliance on natural gas to fuel plants, a huge ongoing cost for utilities.
“It’s a balancing act,” Thomas G. Foster, a company supervisor of regulatory planning, told the PSC.
But the critics said the costs to customers will increase in the coming years, as the project gets closer to construction. Also, the 2006 state law allows Progress to pass along costs — even if it never ends up finishing the project.
“You (PSC members) have an opportunity today to send a message to Progress about what has been called a rate train wreck coming forward,” said Jon Moyle, an attorney for the Florida Industrial Power Users Group, a business coalition that often takes part in utility cases.
Rehwinkel said he would like to see Progress’ $135 million request for the Levy project reduced by at least $55 million. He said that would allow the company to continue working on a crucial license for the project and to cover already-approved costs that have been spread over a number of years.
Burnett, however, said critics were asking to “arbitrarily limit” the costs with such a proposal.