Florida Power and Light and Duke Energy are charging their customers TODAY for reactors that they “might” bring online a decade or more from now!
What?! That’s right…
Listen to this radio spot:
PSC Approves another $43 million more for Florida’s nuclear tax, even after Duke cancels their project
Duke Energy, formerly Progress Energy, has been charging customers for new reactors at Levy county in Florida since 2009. When Duke decided to cancel the project estimates were over $24 billion and the project had experienced a shocking 8-year delay. Duke still plans to pursue the operating license, they got to keep $1.5 billion of consumer money and their shareholders made a $150 million profit. For what? Similarly, Progress/Duke customers are on the hook for over $1 billion for the failed Crystal River uprate project.
Florida Power & Light (FPL) is charging its customers now for costs associated with building two new reactors at their Turkey Point plant near Miami. Like Duke’s cancelled Levy project, estimated costs have soared to nearly $20 billion and the project is delayed. The Public Service Commission just voted to approve another $43 million for this speculative project. Then we have FPL’s St. Lucie unit 2, showing evidence of accelerated wear since the uprate that cost customers over $1 billion. Will this lead to more expensive repairs, on the customers’ dime?
What is Nuclear Cost Recovery?
Nuclear cost recovery allows utilities to charge ratepayers in advance for nuclear projects. The legislature’s intent was to make nuclear projects more attractive to utilities. Boy, did that ever work! A report prepared by Synapse Energy for the Union of Concerned Scientists lists nuclear cost recovery as a primary force behind Duke Energy and FPL’s willingness to pursue nuclear. And why wouldn’t they when all the risks of the project have been shifted from the utility shareholders to you, the ratepayers? In fact, without nuclear cost recovery, it is unlikely that any utility would invest in these financially risky projects. What’s more, Wall Street won’t finance them, so why should you?
How Did This Happen?
The Florida Legislature gave power companies direct access to your wallet with minimal accountability when they passed Senate Bill 888 in 2006 (see page 69 of linked document) and the 2008 Florida Energy Bill. Acting on that direction, the Florida Public Service Commission (PSC) gave approval to the utilities in 2009 and again in 2010 to charge you in advance for hundreds of millions of dollars – in advance of delivering power – for these costly new reactors. In 2011, the legislature would not even consider an amendment that would end this scheme, despite the fact that there is diminished need for power in these tough economic times. The need for these new reactors is questionable at best, yet, in 2012, the utilities got approved for another ~$300 million, but Floridians are getting more vocal in their opposition. The recent Florida Supreme Court case challenging the constitutionality of the “nuclear tax” was ruled against.
What is Happening to Fix This Mess?
Some legislators are working hard to stop this madness. Former Republican State Senator Mike Fasano voted FOR the legislation in 2006 and spent the rest of his time in Florida office actively advocating for consumers by campaigning to repeal it. In 2010, Senator Fasano wrote letters to the legislatures in North Carolina and Iowa when they considered passing similar legislation. Senator Fasano became Representative Fasano (R), representing Pasco county in 2012. He teamed up with a bi-partisan group of representatives, including long-time champion against the nuclear tax, Representative Michelle Rehwinkel Vasilinda (D-Tallahassee), and others including Dwight Dudley (D-St. Petersburg), and Mark Danish (D-Tampa). They proposed to repeal the statute during the 2013 legislature with HB 4003. That bill was never heard in committee. A Republican cadre in the Senate proposed a series of amendments with SB 1472, that passed in the Senate and the House, after much lively debate. Governor Scott signed SB1472 into law, placing the ball back in the PSC’s court to protect consumers. While this is a step in the right direction, these changes don’t go far enough. Obviously the PSC didn’t get the message, because they approved another $43 million in 2013. Consumers in Florida have been fleeced, while the company and its shareholders take no risk at all. A repeal is the best solution.
For the 2014 legislative session, Representative Rehwinkel Vasilinda has already filed a repeal bill in the form of House Bill 4001, the first bill filed for the session. Newly elected Representative Amanda Murphy is already taking a hard stance on repealing the nuclear tax. See a television news clip here.