PSC to consider nuke costs for customers

in Uncategorized by

Jim Saunders of the News Service of Florida reports: State regulators next week will plunge back into questions about expanding nuclear power in Florida — and consider the down payment that residents and businesses will have to make in 2012.

Florida Power & Light and Progress Energy Florida are seeking to pass along about $335 million in nuclear costs to customers next year. While a large chunk of the money would go toward upgrading already-existing nuclear plants, customers also would cover expenses for new plants that are not slated to start operating for at least another decade.

The companies, backed by many state policymakers, contend that Florida needs to shift to more nuclear power to help reduce reliance on natural gas and coal and to save money for customers long term.

In a document earlier this year, Progress argued in favor of new nuclear reactors in Levy County by saying the company and Florida “need a more diverse energy portfolio to decrease their dependence on fossil fuels such as coal, natural gas and oil, which can be extremely volatile in price and supply. New, advanced-design nuclear power remains the best available technology to provide reliable electric service and to make significant reductions in greenhouse gas emissions.”

But attorneys for consumers, business and environmental groups are balking at many of the costs that the utilities want to pass along to ratepayers.

In filings with the Florida Public Service Commission, the attorneys openly questioned whether the utilities will wind up building the new nuclear plants. Also, they have pushed to get better information about how much the nuclear projects will ultimately cost and how long they will take.

“I think we are entitled to look at the big picture,” said Vicki Gordon Kaufman, an attorney for the Florida Industrial Power Users Group, a coalition of businesses that regularly takes part in utility cases.

The debate will play out during a multi-day hearing that is scheduled to start Wednesday at the Public Service Commission.

Trying to encourage more nuclear power, state lawmakers in 2006 approved allowing utilities to incrementally pass along project costs rather than waiting until a power plant starts operating.

As a result, FPL and Progress go before the Public Service Commission each year to justify the costs for their nuclear projects. But since the legislation passed, it also has meant customers have been required to pay for nuclear projects that will not start producing electricity for years — and might not ever be finished.

FPL is seeking approval to collect about $196 million in 2012 to help upgrade nuclear plants in St. Lucie and Miami-Dade counties and to continue taking steps toward building two new reactors at the Miami-Dade site, which is known as Turkey Point.

If the commission goes along with FPL’s request, a residential customer would pay $2.09 a month next year to cover the costs. That figure is based on a customer who uses 1,000 kilowatt hours of electricity, though many customers use more than that amount.

Most of FPL’s requested costs, about $172 million, are related to upgrading the already-existing plants. In a filing with the commission, FPL President and Chief Executive Officer Armando Olivera said those projects would increase the company’s nuclear capacity about 15 percent.

But the other groups in the hearing are expected to dispute some of FPL’s costs for the upgrade project. For example, the state Office of Public Counsel, which represents consumers, argues that FPL decisions to “fast track” the project led to higher-than-necessary costs — an argument that FPL disputes.

In contrast to FPL, most of the debate about Progress likely will center on its plans to build two new reactors in Levy County.

The utility is asking to collect about $135 million next year for that project, with the company saying the reactors would start operating in 2021 and 2022. The total estimated cost of the project is between $22 billion and $25 billion, according to a filing by the Office of Public Counsel.

Deputy Public Counsel Charles Rehwinkel said Thursday he will likely argue that Progress should only be able to receive roughly half of the $135 million it is requesting. He said he wants the commission to approve the “bare minimum” that Progress needs for costs such as the lengthy process of licensing the project.

Rehwinkel said Progress has already pushed back the estimated operating date of the project by about five years, and he questions whether it will be ready by 2021.

In a document filed with the commission, John Elnitsky, a Progress vice president, said the company is carrying out the Levy County project at a “slower pace” than earlier expected. But he said the company is doing the work needed to meet the 2021 and 2022 dates.

As part of its request to the commission, Progress also sought about $22 million to help pay for upgrading an existing nuclear plant at its Crystal River complex. But company spokesman Tim Leljedal said that request has shrunk to about $5 million because Progress needs to do major repairs at the plant related to replacing concrete in a containment building’s walls.

If the commission approves Progress’ revised request for the Levy and Crystal River projects, residential customers in 2012 would pay about $4.66 a month for 1,000 kilowatt hours to cover the costs, Leljedal said in an e-mail.

The commission hearing comes at a time of heightened scrutiny of nuclear power, largely because an earthquake this year triggered a disaster at Japan’s Fukushima plant.

But Florida leaders, including Gov. Rick Scott and many lawmakers, have made clear in recent years that they support expanding nuclear power. Also, the St. Petersburg Times reported this week that PSC Chairman Art Graham said he sees nuclear power as a critical power source in the future.

Mayco Villafana, an FPL spokesman, said in an e-mail this week that nuclear plants will save customers billions of dollars long term because they do not require the ongoing costs of buying fuel such as natural gas.

“Nuclear power continues to be an important part of providing affordable, clean and reliable electric service to our customers,” Villafana said.

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.