Supreme Court upholds nuclear fee
On the same day the Florida Supreme Court upheld a nuclear fee on utility customers, Florida legislators sent to the governor new tools regulators can use to hold electric companies more accountable when collecting the money.
In a unanimous opinion, the Florida Supreme Court rejected the arguments of the South Alliance for Clean Energy which had claimed that the Public Service Commission exceeded its authority when it allowed the Florida Power & Light and Duke Energy (previously known as Progress Energy of Florida) to collect the nuclear fees for nuclear plants that may or may not be constructed.
The clean-energy coalition argued that the PSC decision was "arbitrary and unsupported by competent, substantial evidence.'' Download SCOFLA SACE ruling
The court ruled that the legislation provided sufficient guidelines that neither the agency nor the courts can determine whether the agency is carrying out the intent of the legislature. Citing a previous decision regarding AT&T, there is “no indication that the legislative policy-making function has been usurped by or improperly transferred to the PSC.” The ruling came just an hour before the Florida Senate sent to the governor a bill to scale back the nuclear cost recovery statute by imposing new hurdles before companies can ask the PSC to impose the fees.
The 2006 law has allowed the state’s two largest utility companies to collect more than $1.4 billion in customer fees. FPL used the money to update its nuclear plant in St. Lucie County, saving customers an estimated $100 million in future fuel costs in the first years. Duke Energy, however, has used the money to plan a nuclear reactor in Levy County.
The bill reduces that interest rate by which the utilities can charge customers for loans and requires them each year to prove to the PSC that their nuclear-related expenses and proposals are reasonable.
If the companies cannot demonstrate that they plan to complete the construction of the nuclear plant, they will no longer be allowed to collect money. They have 10 years to begin construction or lose access to the fee.
FPL spokesman Mark Bubriski said the utility opposes changes to the bill because they believe it has resulted in major savings to utility customers already.
“It is fortunate for Floridians that the Legislature rejected anti-nuclear activists’ short-sighted efforts to repeal the lawm,’’ he said. “Although this legislation will not affect our recently completed nuclear upgrades, we still have serious concerns regarding its impacts.”
Having completed its upgrades, FPL recently asked the PSC to reduce the amount it seeks each year from customers for nuclear projects. If adopted, the 1,000-kwh residential rate will drop from the current $1.65 a month to 30-cents a month beginning in January.
Stephen Smith, director of SACE which has fought for years to repeal the law, said he was encouraged that legislators have agreed to modify it but noted that it will only be as good as the regulators.
"The only way the bill works is if the Public Service Commission works,'' he said but wasn't optimistic.
"If the Public Service Commission had wanted to protect consumers from this abuse they could have before,'' he said. "They have additional tools but it is going to come down to commissioners.”
Jerry Paul of the Energy Information Center, a coalition of nuclear engineers, commended the Supreme Court ruling.
“It appears as though cooler heads are prevailing,” he said. “I think that’s good for ratepayers who won’t have to pay increased charges on the pre-construction of power plants by people who want zero-emission electric supply.”
Rep. Dwight Dudley, a St. Petersburg Democrat who has filed legislation to repeal the nuclear fee, said the court decision was not unexpected and believes it returns the focus to the legislature.
“There’s a clear message here,’’ he said. “It’s not how they spend the money; it’s how they take the money. It’s taxation without representation when we have a CEO from a corporation take from us.”