Energy advocates sue to throw out state's nuclear cost recovery law
The state law that has allowed Florida Power & Light and Progress Energy to charge customers $1 billion so far for speculative nuclear power plants is unconstitutional, a group of energy advocates claims in a lawsuit before the state's highest court.
The Southern Alliance for Clean Energy is asking the Florida Supreme Court to throw out the 2006 law and reverse a decision by state regulators who have allowed the companies to charge customers for upgrading existing nuclear power plants and for the pre-construction costs of building new nuclear power plants that may never be built.
"State-sanctioned monopolies are using this nuclear-tax scam as an entitlement to extract money from consumers," said Stephen A. Smith, executive director of the Southern Alliance for Clean Energy. "This a really bad deal for the consumers of Florida."
The alliance filed an appeal with the court in December, asking it to reject an order by the Public Service Commission in October that allowed FPL to collect $196 million from customers for nuclear projects in 2012. The order allowed Progress to collect $86 million for this year.
Smith argues that the law is unconstitutional because it gives "unbridled discretion" to the Public Service Commission, the state agency that regulates utilities, to "make up law as they go"by modifying and changing the rules intended by legislators.
Since the law was passed, he said, the prospects for building nuclear power plants in Florida have changed dramatically. The projected cost of construction has tripled, the need has declined, and the questions about safety have grown, he said.
Meanwhile, the PSC has continued to allow the companies to charge customers for prospective nuclear projects and, in FPL's case, use $172 million of the fees authorized for 2012 to pay for improvements to its existing Turkey Point plant in Miami-Dade County and its St. Lucie plant on Hutchinson Island.
"As we've said all along, right now, FPL is going through a rigorous, multi-year state and federal licensing process required to build a new plant," said FPL spokesman Michael Waldron.
But the company has not committed to building the new plant.
"Once the licenses are obtained, we will conduct an analysis of electricity needs, projected fuel costs, and consult with our regulators to determine the course that will ensure our customers continue to experience the reliable, affordable electricity that they have come to expect," Waldron said.
Smith argues that "the Legislature created a sloppy law that is unconstitutional" and believes the PSC should be requiring the utility companies to prove the need for the power plants, given the changing economy, before it authorizes fees to customers.
"The determination of need of five years ago has been predicated on what can now be considered erroneous data,"said Cindy Lerner, mayor of the Village of Pinecrest, which is about 15 miles from FPL's Turkey Point.
Lerner said there is growing community opposition to the proposed nuclear projects. In addition to Pinecrest, the Miami-Dade League of Cities and its 34 municipalities have passed resolutions urging the PSC to deny the requests for additional funding for nuclear reactors and want the Legislature to repeal the law.
The issue is a political hot potato for legislative leaders, however. Since 2007, they have refused to give hearings to bills that would repeal the nuclear-cost provisions.
Sen. Mike Fasano, R-New Port Richey, said a settlement agreement reached on Friday between Progress Energy and state regulators was proof that the company had pulled back from its commitment to build a new nuclear power plant in Levy County. The company agreed to reduce how much it will charge customers for the proposed plant, refund $288 million related to a controversial nuclear-plant repair in Crystal River and increase base electric rates by $150 million a year.
"That tells you right there that the nuclear power plant in Levy will never be built," Fasano said. "They should be honest with the ratepayers and with the Public Service Commission and refund the ratepayers their money."
Smith disagreed with the settlement, he said, because it encourages Progress to bring the Crystal River plant back online and will run the risk of "throwing good money after bad."