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House Pitches Plan to Phase Out Precharging for Nuclear Plants

April 11, 2013 - 6:00pm

Electric customers in the future wouldn't be required to front the costs of nuclear power plants, but charges already being paid to the state's two largest utilities for proposed reactors could continue under legislation advanced by a House committee Thursday.

A proposal put together by the House Energy and Utilities Subcommittee would allow the current charges for plants being planned by Progress Energy Florida and Florida Power & Light to continue to be paid for up to 13 years, though at a slightly reduced rate. But from now on, the arrangement wouldn't be allowed.

The prepay arrangement was allowed under a controversial 2006 law that has let the electric giants collect hundreds of millions of dollars while planning to build new facilities -- even though critics complain there's no guarantee the generating plants will ever be constructed.

The subcommittee's bill, if it were to become law, would "effectively" end the 2006 law, said the panel's chairman Rep. Jose Felix Diaz, R-Miami, while grandfathering in the arrangements already in place.

The proposal, set to appear before the Regulatory Affairs Committee as early as Tuesday, also would require the state to conduct an additional review on the viability and cost effectiveness of a nuclear plant once it receives a license from the Nuclear Regulatory Commission.

Progress anticipates receiving a license from the Nuclear Regulatory Commission by the end of 2014 for two proposed reactors in Levy County. The plant, to be located seven miles inland from the Gulf of Mexico, eight miles north of the company's Crystal River Energy Complex in Citrus County, likely will cost more than $20 billion and could take eight to 10 years to build once the license is approved.

The Senate is considering a bill (SB 1472) that would allow the nuclear-project costs to continue to be collected, but in stages based upon licensing and certification from the Nuclear Regulatory Commission.

The Senate bill would also require the Public Service Commission to determine after 10 years considered the halfway mark in the planning and construction of a nuclear plant -- if the funding for the project should proceed.

Meanwhile, Sen. Jack Latvala, R-Clearwater, added language this week to the Senate's proposed budget that would require the state Public Service Commission to "perform a comprehensive review of the continuing prudency, cost effectiveness and need of any proposed nuclear power plant" that has received such funding and meets other criteria. Latvala's proposal is targeted at the Levy County project.

Diaz said that while many opponents have called for already-collected money to be refunded, "there is nothing to refund because those funds have been expended."

Rep. Dwight Dudley, D-St. Petersburg, opposed extending the current fees through 2025 -- as the House measure proposes. He argued the current law and the bill essentially give taxing authority to private corporations, for an energy option Dudley said wasn't viable except for the law, because of the high cost of the construction.

"There's been a law created that puts a gun to consumers' heads, essentially, that takes money from consumers," Dudley said. "But for the monies that are being raised by this advance nuclear cost recovery fee, we would not be on this road to additional nuclear power."

FPL, which has proposed a project in Miami-Dade County, has noted that money collected after the 2006 law also has helped upgrade existing nuclear plants.

Susan Clark, representing FPL, Progress Energy Florida, Tampa Electric Co. and Gulf Power Co., urged lawmakers not to be hasty in amending the 2006 law.

"Minor changes to the statute could impose enormous risks that put in jeopardy nuclear projects," Clark said.

Rep. Clay Ingram, R-Pensacola, expressed concern that disallowing the funding mechanism would eliminate nuclear power from future energy plans.

"I still believe that harnessing the power of the atom is one of the greatest advances mankind has made," Ingram said. "I think it still will be one day a huge part of our energy portfolio."

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