PSC showdown Friday: Can Progress Energy charge customers upfront for nuke plant costs?
Wake up and good morning. What once seemed a slam dunk deal for Progress Energy -- building a new nuclear power plant complex in rural Levy County north of Tampa Bay -- is now very much up in the air. Tomorrow, Friday (Oct. 16), the Florida Public Service Commission is set to vote on whether to approve Progress Energy and and FPL's request to charge their customers in advance for their plans to build four new nuclear reactors in Florida. (Progress Energy plans two in Levy County (see rendering) and FPL also seeks two in South Florida.)
Estimated (and no doubt still escalating) costs for these plants: $35 billion. Florida is one of a few states that allows utilities to pass the planning costs such as design and engineering costs for nuclear reactors as they’re incurred as an incentive to build the plants years before obtaining the federal licenses required.
But resistance is growing. Critics say investors, not consumers, should bear more of the risk of nuclear power plants. And economic circumstances have stalled some of the initial momentum for new nuclear power. Enough so to ask: will Progress Energy itself ultimately decide the nuke plants are no longer worth the growing controversy in the state?
Customers are not happy with Progress Energy Florida, especially now that electricity rates have soared so rapidly. And the President George Bush era of "let 'er rip" support of new nuclear power is fading. Or at least slowing.
This week, a former federal energy regulator, environmentalists and others asked Florida leaders to delay their pursuit of nuclear power in light of lower electricity demand and the rising costs of building new reactors, the Florida Sun-Sentinel reports. The group, the Southern Alliance for Clean Energy, issued the following statement:
"The Florida PSC should not vote Friday to rubber stamp staff recommendations that would impose a $200 million front-end bite on ratepayers before a single kilowatt of power is produced by new nuclear reactors, particularly since the economic slowdown has already eliminated the need for
four nuclear reactors on the scale that both Progress and FPL are proposing."
I recall the first visit in 2006 to the St. Petersburg Times by Progress Energy Florida chief (at the time) Jeff Lyash to explain its reasons for seeking a new nuclear power plant. Lyash's message? "It's important to have a new nuclear plant in Florida." Here's a story on that visit.
What he meant, of course, is that Florida was a growing state and there will be big energy demands in the future to be met. Building nukes takes a decade or more, so it's time to get going, he said. (Photo: A main intersection in rural Levy County near the proposed Progress Energy nuke plant site. By Keri Wiginton, St. Petersburg Times.)
Since then, issues have become muddy. The 2006 boom times quickly fizzled into a deep recession which raised questions about the overall electricity needs for the state. Progress Energy, like many other utilities seeking new nukes, quoted an initial price tag for the nuke plants that quickly escalated and eventually tripled, punching some big holes in the company's credibility in selling the idea.
Then it became clear that much of the plant's extensive upfront costs would be paid for via higher rates charged customers who would not see the payback (if ever, for older customers) until 2017 or perhaps later. And finally, the alternative energy industry gained ground -- backed by both Florida Gov. Charlie Crist and President Barack Obama -- reviving debates on what forms of energy and conservation will prove most cost effective and environmentally friendly.
And it all lands in the Florida PSC's lap in 24 hours.
-- Robert Trigaux, Times Business Columnist