Customers of Duke Energy Florida will see a freeze on base electric rates maintained through 2018, but will still have to make payments for the scrapped plans for a nuclear power plant and another that's been abandoned, under a major deal with the states utility regulating agency.
The Florida Public Service Commission voted 4-1 on Thursday, with Commissioner Eduardo Balbis opposed, to approve a settlement package with the energy giant that the chairman called "the best resolution at this time."
"There is now a fence around the things we can control," said Commission Chairman Ronald Bris "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."
For customers, the deal will include an increase in the residential bill of $8.24, about 7 percent, on a 1,000-kilowatt hour bill starting in January.
The deal does finalize Duke's decision to scrap -- at least for the time being -- a proposal to build two nuclear reactors in Levy County. The company spent $1.5 billion on the project.
However, in order to cover previously approved costs and equipment already purchased, Duke will continue collecting money through 2017 for the Levy project, with the amount translating to $3.45 a month for a residential customer who uses 1,000 kilowatt hours of electricity.
Another part of the deal involves Dukes decision to permanently shut down a Crystal River nuclear plant that has been offline since 2009.
The agreement caps the amount Duke can recover at $1.4 billion, of which $295 million will be shifted to stockholders.
The commission wasted little time, spending less than a half hour deliberating and commenting before voting. The vote came a day after a five-hour hearing on the settlement package.
Commissioner Julie Brown said the agreement could have been "more robust," but supported the proposal as it provides a certain level of rate certainty and some costs being shifted from customers 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. It's very grave, but there are no compelling alternatives," Brown said.
Opponents who attended the hearing on Wednesday to request a delay in order to gather more input from customers, were mostly absent Thursday as the vote was taken.
Balbis argued against the agreement, saying more time was available to review the deal, noting a lack of expert testimony during the hearing.
"We have plenty of time to thoroughly review the remaining few critical issues in this case," Balbis said. "I haven't seen or heard anything in the past two days that has changed my mind."
After the vote, Duke spokesman Sterling Ivey said the company has been following the laws of the state and there have been no findings of unreasonable costs. He also said the agreement will provide long-term certainty on customer prices.
"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 said.
The agreement includes provisions for Duke to add 1,150 megawatts of gas-fired generation by the end of 2017 and gives the company the ability to petition the commission for another 1,800 megawatts of power by 2018.
Duke is already evaluating sites in Florida, including land in Citrus County south of the Levy County site, for a natural gas-fired plant.
