‘Trust but verify’ on Duke Energy deal, industrial power customers say

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A group of large power customers says that if proposed legislation involving Duke Energy Florida is going to save customers money, then that language should be put in the bill.

HB 7109 was amended on Thursday to provide the Florida Public Service Commission with authority to approve bonds that could be issued by Duke to pay for the $1.3 billion shutdown of its Crystal River nuclear plant, which was closed in 2013.

State Rep. Kathleen Peters, a Republican from South Pasadena, told a House committee that the deal offers Duke the opportunity to improve its tarnished image while saving its customers around $600 million. She said the Office of Public Counsel and the Division of Bond Finance had reviewed the deal.

“We have really vetted this thoroughly,” she said. “I feel confident we are doing the right thing.”

But large power users, organized as the Florida Industrial Power Users Group, say that there is an advantage for Duke Energy in the deal.

And as far as protecting large and small customers alike, group attorney Jon Moyle said, the phrase “Trust, but Verify” — attributed to Ronald Reagan quoting from an old Russian proverb — should be the guiding principle going forward.

“This allows them (Duke Energy) to clean up their books,” Moyle told the House Regulatory Affairs Committee. “They have all this debt. They are going to get a big check from the securitization and be able to clean up their books significantly.”

He said he wants bill language that requires expert witnesses to verify before the Public Service Commission that a deal will save customers money. Duke customers, Moyle said, will be exposed to interest rate fluctuations if a secured rate is not nailed down.

State Rep. John Wood, a Republican from Winter Haven, pointed out that the Legislature is on a tight time frame with three weeks remaining in the legislative session.

“I understand this legislation has been adopted in a Senate committee,” Wood said. “When we start tinkering — we don’t have much time in the process. I’m interested in saving (for) my constituents.”

But Moyle responded by pointing to the 2006 state law that allows Duke Energy to recover more than $1 billion for work that won’t produce power for customers.

“Things related to nuclear — the history has not been great,” Moyle said.

“We’re just saying,” he added, “when they (PSC commissioners) hear that evidence we’d like for witnesses to say, ‘Absolutely this is going to save people money. If it doesn’t save people money we’re not going to do it.’”

In her closing remarks, Peters responded only by saying that the Duke bonds, which would not involve government backing, are issued on the stock exchange through federal laws that are “very restrictive.”

“The Public Service Commission is the one that is going to make the agreement on this and they will do the oversight on this,” Peters said.

“And I assure you they will watch it very, very carefully,” she said. “And I’m very confident.”

HB 7019 passed the committee 18-0 and is headed to the House floor. The Senate companion, SB 288, has one more committee stop.

Bruce Ritchie (@bruceritchie) covers environment, energy and growth management in Tallahassee.