PSC members honing in on ways to give utilities their rate increase
Florida utility regulators have begun their hearing on whether to raise electricity rates by at least $2 a month in South Florida, at the request of Florida Power & Light, so that the company can pay for plans to build nuclear power plants.
Under a state law approved by the legislature in 2006, the company can collect the money but can change its mind and never build the facility. Based on the debate this morning right out of the box, three of the five PSC commissioners sound as if they are prepared to give the utilities what they want and blame lawmakers.
Commissioner Julie Brown asked if the statute specifically calls for proof that the company needs to show that it intends to build a plant. Staff lawyer Keno Young said yes. Commissioner Lisa Edgar clarifies that's actually a PSC rule, not in the statute.
But, Young notes, the company doesn't have to decide to definitely build a nuclear plant in order to charge customers and collect money for it. "Is necessary that final decision be made prior to allowing recovery? No," Young said. "But I would note that pre your final order which interprets the statue and the rule calls for intent. If the company is engaged in siting, license, construction or construction of a nuclear power plant, they meet the intent requirement of your order."
"I'm not uncomfortable with the option of pursuing an option,'' said Commissioner Eduardo Balbis, adding that the PSC shouldn't stop allowing the company to move forward on this because "making an irrevocable decision at this time of a project of this magnitude may not be reasonable.''
The utilities must come back every year, he added, and "we are monitoring this. The utilities are monitoring this."
"I find that the utility has done what the statutes has asked for,'' said Commissioner Ron Brise. He said that it could hurt investment in the state if the commission decides not to give the utilities what it wants.
The PSC, a governor-appointed body, makes its decision based on input from the utilities, from the state's consumer advocate, and from the PSC professional staff, now led by Braulio Baez of Miami, a former PSC commissioner who has spent the last decade working for the utilities.
The staff has recommended the PSC adopt the utilities request and raise FPL customer bills by $2.09 for every 1000 kilowatt hours used. It also recommends accepting Progress Energy's request to lower the existing nuclear charge from $5.53 per month per kilowatt hour to $4.68 per month. The mayors of Pinecrest and South Miami call the request "corporate welfare" and are leading an effort to repeal the legislation that gave the PSC the ability to raise fees for nuclear power without requiring them to build them.
The consumer advocate says that neither company is being honest with its cost projections or its commitment to building a multi-billion plant. Whatever the outcome, the change will be reflect on customer bills beginning in January.