Progress Energy customers in dark over increase

Wondering how much you'll pay for Progress Energy's $17-billion nuclear plant? Sorry, that's confidential.

The St. Petersburg utility estimated in March that customers could see an increase of about $9 a month next year to help pay for the project. That number may have changed, but the utility blacked out the numbers in recent filings to state regulators, citing "confidentiality agreements."

The secrecy tests for the first time a 2-year-old state law that allows utilities to bill customers for nuclear projects years before the reactors start producing electricity. Under the law, the state's two largest utilities, Progress Energy and Florida Power & Light, want to raise monthly bills for more than 6-million electric customers across the state starting as early as January.

Progress Energy argues that disclosing the impact on monthly bills will jeopardize its negotiations with Westinghouse Electric Co. and the Shaw Group Inc. for the engineering and construction of the plant in Levy County. Consumer advocates say that customers need more information.

The impasse pits private interests against the public's right to know. "We're not hiding the ball on any of this," said Alex Glenn, general counsel for Progress Energy Florida. "But, again, we're under certain confidentiality agreements."

Progress Energy is still negotiating with Westinghouse and Shaw, and with other utilities that are interested in buying a share in the project, Glenn said. Those negotiations might not be concluded this year. The $17-billion price tag for the nuclear project hasn't changed, he said.

The Florida Public Service Commission is slated to decide Tuesday whether Progress Energy needs the 2,200-megawatt project, and if nuclear is the most cost-effective option. The impact on monthly rates will not be decided until September.

The Office of Public Counsel, the state agency charged with protecting the interests of utility customers, already has told Progress Energy that customers need more information on how the plant will affect electric bills before the September hearings.

"That's something that should be public," said Steve Burgess, associate public counsel. "And not only should be, but absolutely needs to be."

State law has long allowed utilities to guard the secrecy of negotiations when it came to the price of power plants. Yet the new nuclear projects are unlike any case the commission has considered.

For starters, they are far more expensive. The combined cost of the two projects is close to $30-billion. They are also the first nuclear plants to be built in Florida in a generation.

The new law further complicates the picture. Utilities usually have to wait until a plant was producing power before they can start charging customers. Now, utilities building nuclear plants can recover some costs as they go, putting state regulators in the position of weighing the utilities' need for confidentiality against the public's need to know.

Progress Energy argues that releasing price information could help competitors and hurt the ability of Westinghouse and Shaw to negotiate on other projects in South Africa, China and throughout the United States.

Bill Newton, executive director of the Florida Consumer Action Network, said Florida's consumers don't owe those companies anything. Why should Florida's electric customers suffer because Westinghouse wants to pen a deal elsewhere? Without more information, Newton said, customers cannot exercise their right to meaningful and informed public participation.

"It's a sneaky way to do business, and we object," he said.

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

What does the new law do?

Utilities used to have to wait until a plant produced electricity before charging customers for construction costs. The new law allows something called "advance cost recovery" for nuclear projects, so utilities can recover some costs before the plant is completed.

What costs can the utility start billing for, and when?

The utilities will be allowed to bill customers for preconstruction costs, like licensing and site preparation, starting in January. Once construction begins, the utility is allowed to charge customers the interest costs of financing the project.

Do other states have laws like Florida's?

Florida is now one of eight states with similar laws, and others are considering it.

Progress Energy customers in dark over increase 07/09/08 [Last modified: Tuesday, July 15, 2008 5:42pm]

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