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Pay now, get nuclear power in 2016

In a landmark decision for Florida's bid to lead the country's nuclear renaissance, state regulators gave Progress Energy the go ahead to charge customers for its $17-billion nuclear project years before it starts producing electricity.

The decision Tuesday marks the first time a utility will increase customers' bills based on a controversial state law passed in 2006, one of the strongest pro-nuclear policies in the country. The Public Service Commission unanimously approved requests by both Progress Energy and Florida Power & Light, the state's two largest utilities, to charge customers for nuclear projects starting in January. Progress Energy's two nuclear units are scheduled come online in 2016 and 2017.

"We are encouraging utility investment in nuclear electric generation today to ensure Florida's residents have reliable power for tomorrow," said Matthew Carter, chairman of the Public Service Commission.

The Public Service Commission has voted consistently in favor of the new nuclear plants, and Gov. Charlie Crist has been an unwavering supporter. The commission's unanimous approval affirms the commitment to nuclear, even in the face of steep electric rate increases.

The decision paves the way for Progress Energy to add $11.42 per 1,000 kilowatt hours to customers' bills. The average household uses about 1,200 kilowatt hours a month.

In a statement released Tuesday, Progress Energy said it was pleased with the decision.

Utilities lobbied hard for the 2006 law, which allows them to recover investment in nuclear even if the project fails. Charging customers in advance reduces borrowing costs and makes the plant cheaper in the end, the utilities argue. It also bolsters investors' confidence that money borrowed to build the plants will be paid back.

The law is meant to shore up nuclear support against the lingering doubts left over from the nuclear failures of the past. In the wake of the accident at Three Mile Island in 1979, utilities were forced to abandon half-built nuclear plants after pouring billions of dollars into construction.

Bill Newton, executive director of the Florida Consumer Action Network, said he'd like to see the 2006 law overturned, saying voters didn't pay much attention at the time but are now outraged.

"We were busy with the insurance crisis," Newton said. "There was not a big protest against it, because the consequences were not immediately apparent. Now people are going to start screaming bloody murder."

The nuclear charge is in addition to Progress Energy's request to raise fuel rates, which will come up for a hearing in early November. If the fuel rate increases are also approved, Progress Energy customers will see a total increase of nearly 25 percent starting in January. The cost of 1,000 kilowatt hours will increase to $137.88, from today's $110.59.

Asjylyn Loder can be reached at aloder@sptimes.com or (813) 225-3117.

>>FAST FACTS

Pricey power

Progress Energy has predicted how much extra customers will pay per 1,000 kilowatt hours each year just to start paying for its planned $17-billion nuclear project in Levy County. (The increases are not cumulative.)

2009 $11.42
2010 $10.45
2011 $16.51
2012 $15.07
2013 $21.89
2014 $27.39
2015 $28.73
2016 $18.58
2017 $3.59

Source: Progress Energy. The average household uses about 1,200 kilowatt hours a month.

Pay now, get nuclear power in 2016 10/14/08 [Last modified: Monday, October 20, 2008 4:41pm]
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