Nuclear early cost recovery law before Supreme Court

April 30, 2013 | By Barbara Vergetis Lundin

The Florida Senate has passed a bill that attempts, for the first time, to address the "early cost recovery" law passed in 2006 allowing Florida power companies to place the financial costs of building new nuclear reactors on customers.

Senate Bill 1472 adds procedural steps that require power companies seeking cost recovery from customers to show the Florida Public Service Commission that the plants are feasible and projected costs are reasonable. It also disallows a rate of return to power company shareholders on cost recovery if the company abandons a reactor project.

The Southern Alliance for Clean Energy is challenging the constitutionality of the 2006 "early cost recovery" law before the Florida Supreme Court and calling for a full repeal in order to protect customer interests. A decision by the court is currently pending.

"The Florida Senate has recognized the flawed policy that charges consumers in advance for risky and expensive new nuclear reactors. The bill which passed the Senate today offers more procedural protections for consumers although the devil is in the details," said Susan Glickman, a consultant for Southern Alliance for Clean Energy.

"Its impact is highly dependent on a rigorous review by the Florida Public Service Commission. While it's a step in the right direction, the bill does not address the fundamental problem in the utility planning process -- that the incentive is for power companies to build the most expensive power plants because that's how they make money for their shareholders, to the detriment of ratepayers," she said.

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