Public Service Commission approves “best resolution” deal with Duke Energy

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Although Duke Energy customers will receive an electricity base-rate freeze through 2018, they still have to pay for non-functioning nuclear power plants, according to a deal finalized by the state power utility regulatory agency.

In Thursday’s 4-1 vote, the Florida Public Service Commission approved the agreement with Duke that has consumers pay for the scrapped Levy County and abandoned Crystal River plants.

Only Commissioner Eduardo Balbis objected to the deal, though he called it the “the best resolution at this time,” reports Jim Turner of the News Service of Florida.

“There is now a fence around the things we can control,” said Chairman Ronald Brisé. “It provides a certain level of certainty for a particular amount of time and it also takes off the table Levy (County nuclear plant), and it addresses many other challenges that could come about and would have to go through various processes in order to get some resolution.”

The deal includes a rate increase in January of $8.24, or about 7 percent, for every 1,000-kilowatt hour. The agreement also allows Duke to scrap two Levy County nuclear reactors, where the company spent $1.5 billion, but they will continue collecting money through 2017. The amount translates to $3.45 a month per 1,000-kilowatt-hours used by customers.

Duke now can permanently mothball the Crystal River nuclear plant, which has been offline since 2009. The board capped recovery costs at $1.4 billion for that plant, with $295 million shifted to stockholders.

It took less than a half hour for the committee to consider and hear comments before voting. The day prior, there was a five-hour hearing on the settlement package.

The agreement could have been “more robust,” said Commissioner Julie Brown. However, she supported the proposal since it provides rate certainty, as well as shifting part of the burden to stockholders.

“I know the pressure that is on these customers, and that they will feel the impact of this settlement for years to come,” Brown said. “It’s very grave, but there are no compelling alternatives.” 

Many opponents at Wednesday’s hearing, who requested a delay to gather additional input from customers, did not show Thursday for the final vote.

Balbis said the agreement did not have to be finished quickly, and that there was more time to analyze the agreement, due to a lack of expert testimony during earlier hearings.

“I haven’t seen or heard anything in the past two days that have changed my mind,” Balbis said.

Sterling Ivey, a Duke Energy representative, told the News Service that the company followed all Florida laws and there were no signs of unreasonable costs. The agreement provides long-term assurance that consumer prices will stabilize, he added.

“It allows the company to move forward with planning for new generations (of power) in Florida and will stabilize the customer price for the years beyond 2016,” Ivey told reporters.

The agreement allows Duke to add 1,150 megawatts of gas-fired energy production by the end of 2017. In 2018, they can ask the board for another 1,800 megawatts of power. 

Duke is already evaluating sites in Florida for a natural gas-fired plant, including sites in Citrus County south of the Levy County nuclear power plant site.

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.