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Progress Energy customers could soon pay much more for Levy County nuclear plant

For Progress Energy customers upset over paying about $5 a month in advance to build the proposed Levy County nuclear plant, just wait.

Within three years, that cost will more than quadruple and, by 2020, it will rise to almost $50 a month for the average Progress Energy customer.

That's because as the plant draws closer to going online, bills for the most expensive construction costs will come due.

Based on projections Progress Energy gave to the state Public Service Commission, the average customer will pay $23.78 a month in 2014 and $49.29 a month in 2020 for the new power plant. That's on top of what customers pay to turn on the lights, run the hot water heater and fire up the air conditioner.

The costs don't end in 2020. It will take much longer than that to pay it all off.

"The bill could go up $50 to $70 a month," said Charles Rehwinkel, deputy state public counsel, which represents consumers before the PSC.

Progress Energy currently includes the nuclear charge in the $119.34 per 1,000 kilowatt hours that the average customer uses each month. The charge applies only to customers of Progress Energy, which has 656,000 customers in the Tampa Bay area mostly in Pinellas and Pasco counties.

Suzanne Grant, a spokeswoman for Progress Energy, said the utility is hoping to offset some of the burden on ratepayers by selling interest in the nuclear plant to another company.

"We've been actively pursuing joint ownership," Grant said. But she noted that "we're not on the brink of any announcements at this time."

In addition, Grant said the up- front charges serve as a benefit to ratepayers because customers avoid picking up the tab for interest on construction loans. And fuel for nuclear plants is less expensive than for coal and natural gas, so in the long run customers will avoid the volatile prices of fossil fuels.

In 2006, state lawmakers passed legislation that allows utilities to charge customers in advance for the development and construction of new nuclear plants. Most states do not allow utilities to collect construction costs in advance, including North Carolina, where Progress Energy maintains its headquarters.

In December 2006, Progress Energy announced plans to build the nuclear plant in Levy County on a 3,000-acre site about 8 miles north of the utility's Crystal River nuclear and coal energy complex. The utility has been charging ratepayers for the new nuclear plant since 2009.

Early estimates indicated the new nuclear plant would cost $4 to $6 billion with the first of two reactors scheduled to go online in 2016 and the second in 2018. The estimates now range from $17 billion to $22 billion and the projected start date is 2021 for the first reactor and 2023 for the second.

Progress Energy is awaiting license approval by the Nuclear Regulatory Commission. A decision is expected in late 2012 or early 2013.

While continuing to move through regulatory and planning stages, the utility has said that it is considering all options, including canceling the project.

If Progress decided not to build the plant, it would not have to refund to customers the fees collected so far. Through June, the utility has collected $471 million and has spent $795 million.

Next week, the Public Service Commission will consider a request from Progress Energy to temporarily decrease the pre-construction charges by about 50 cents for the average customer. Grant said the request is not a reflection of the company losing interest in building the plant.

"We were slowing down the spending and concentrating on the licensing," Grant said.

Bill Johnson, president and chief executive officer of Progress Energy, reiterated the company's commitment to nuclear energy during a quarterly report conference call Thursday, saying regional and new nuclear "is the way to go."

And Art Graham, chairman of the PSC, told the St. Petersburg Times editorial board this week that he believes nuclear is important for Florida's future.

Rehwinkel said his office wants to see significant reductions in customer charges while the utility is seeking its license and work is not being done.

"The customers are already on the hook for a billion dollars whether you build the plant or not," Rehwinkel said. "Don't spend a nickel more than what it takes to get that license."

Ivan Penn can be reached at or (727) 892-2332. Follow him on Twitter at and find the Consumer's Edge on Facebook.

Raising money

for a reactor

Here are the projected amounts Progress Energy has indicated it will need to charge the average customer monthly to cover expenses prior to the Levy County nuclear plant going online, currently scheduled for 2021.

2013: $7.98

2014: $23.78

2015: $9.65

2016: $16.85

2017: $26.05

2018: $34.45

2019: $43.87

2020: $49.29

*The costs don't end in 2020. It will take much longer than that to pay it all off.

Progress Energy customers could soon pay much more for Levy County nuclear plant 08/04/11 [Last modified: Friday, August 5, 2011 9:50am]
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