Fate of nuclear fee depends on disparate House, Senate bills

Apr 17 - Miami Herald (FL)

Florida legislators continued to fast-track two proposals on Tuesday to rework the unpopular nuclear fee on customer utility bills, but activists warned that the two plans could have drastically different impacts on customers.

The House bill (PCB 13-01) will allow Florida Power & Light and Progress Energy to continue collecting the controversial nuclear fee to pay for the development of power plants, even if the plants never get constructed. The Senate plan, SB 1472, could end the fee if the utilities fail to obtain a license from the Nuclear Regulatory Commission -- a process that the federal government has currently put on hold.

Since 2006, when lawmakers passed the nuclear cost recovery statute to encourage development of nuclear power, Florida customers of Tampa-based Progress Energy and Juno Beach-based Florida Power & Light have paid an estimated $1.5 billion in fees to pay for the development of future nuclear power plants. Both the Senate and House bills could put an end to development of additional nuclear power plants outside of the existing proposals, but each takes a different approach to the current projects.

"The Senate has a framework to impose a series of new decision points that say it's much better to walk away from the $1.5 billion we've already spent than to waste another $35 billion more,' said Mark Cooper, a senior fellow with the Institute for Energy and the Environment at the Vermont Law School, who has analyzed the bills. "The House does exactly the opposite."

Progress Energy has charged customers more than $1 billion to expand the now-crippled Crystal River nuclear power plant and to start developing a new nuclear power plant in Levy County. The company terminated the Crystal River project, but has kept $150 million of the money in profits from all its projects. Florida Power & Light collected $530 million from the nuclear fee and used the money to finance expansions to its existing power plants at Turkey Point and in St. Lucie County. It has also proposed building two new reactors at Turkey Point, but has not obtained a permit to do it.

Florida's utility companies have said they oppose any change to the current law, but did not make any formal statements at Tuesday's hearings.

Voter discontent with Tampa-based Progress Energy's troubled power plant has prompted four Tampa-area senators to take the more aggressive approach to revamping the law, although they have stopped short of repealing the proposal.

Under the Senate bill, after the utility obtains its license for the nuclear plant it must petition the Public Service Commission before it can get approval to charge customers for any additional costs associated with the plant's development.

"If we had this bill in place six years ago, the issues dealing with the Progress Energy Levy plant, instead of being an $800 million project, it would have been significantly lower,' said Sen. John Legg, R-New Port Richey, a Senate bill sponsor.

Susan Glickman, lobbyist for the Southern Alliance for Clean Energy, which is pushing for alternatives to nuclear power, said the effectiveness of the Senate bill "depends upon how rigorous the Public Service Commission is in their review."

The Senate Community Affairs Committee voted unanimously to approve the bill.

By contrast, the House takes a more inclusive approach -- allowing the companies to continue business as usual but imposes new rules on future nuclear projects. It adds a requirement that utilities include a line item on each customer's utility bill showing how much is going toward nuclear construction.

The House Regulatory Affairs Committee rejected a series of amendments by Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, that would have forced state regulators to consider alternatives to nuclear power before imposing the nuclear fee. "It keeps us from picking winners and losers,' she said.

But House Republicans, many of whom were elected on the strength of the utility industry's campaign contributions, have flatly rejected using the rewrite of the nuclear fees law to allow for any competition to the utility giants. Rep. Jose Felix Diaz, R-Miami, House Energy and Utilities Committee chairman, said the process regulators go through "is already pretty extensive" and the changes were not needed.

Both bills change the interest rate the utility companies can charge customers to pay for planning and development of the nuclear plants, saving an estimated $800 million over the 20-year life of the construction process.

The Senate bill also allows the PSC to authorize a rebate to customers in certain circumstances, but neither Legg, nor Curt Kiser, the general counsel for the Public Service Commission, could conceive of any scenario that would allow customers to receive a refund.

Mary Ellen Klas can be reached at meklas@MiamiHerald.com and on Twitter@MaryEllenKlas

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