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Public Counsel: Progress Energy should stop charging customers for Levy County nuclear plant

TALLAHASSEE — Progress Energy customers should no longer have to pay for any additional development and construction costs for the proposed Levy County nuclear plant, the Office of the Public Counsel argued Tuesday.

The construction has repeatedly been delayed, and now there is a growing concern that the plant might never be built, the Public Counsel officials told the state Public Service Commission at a hearing to decide how much Progress customers should have to continue paying in advance for the plant.

That being the case, they argued, the advance fees should be limited to paying off the $1 billion that Progress already has spent on the plant, at least until the utility secures a license for the operation from the Nuclear Regulatory Commission. In the meantime, the PSC should order Progress to spend no more money, other than what is necessary to acquire the license.

The license approval is expected by the end of 2012 or early 2013.

"Now that this project has reached $1 billion, we ask you to hold the line," Charles Rehwinkel, deputy public counsel, said in his opening statements to the commission. "We say enough is enough. Customers are weary of shouldering nuclear costs."

Progress Energy argued that it has slowed spending while awaiting the license, but it still needs money to continue moving forward with the project. Talk of further delays and the possibility the plant won't be built at all are just "distractions," company officials told the commission.

"What we're doing today is the work we believe needs to be done to continue this project while minimizing the impact on customers," said Tim Leljedal, a spokesman for Progress, which has 656,000 customers in the Tampa Bay area, mostly in Pinellas and Pasco counties. "If we were to stop doing portions of the work, that could potentially impact the overall project."

As such, Progress is proposing to lower the advance fee its customers pay for construction of the nuclear plant from an average of $4.99 this year to $4.47 next year. Rehwinkel is asking the PSC to reduce the $4.99 to $3.24.

The project, which was initially to cost $4 billion to $6 billion and to go online in 2016, already has been delayed twice. Progress Energy now plans to build a $20 billion nuclear plant that would include two nuclear reactors, with one scheduled to go online in June 2021 and the other 18 months later.

Officials in the Public Counsel's Office told commissioners they think Progress Energy is looking to delay the project again and not put it in service until 2027, if at all.

Even as the project moves forward, consumer advocates worry about the financial impact construction of the plant will have on customers — both residential and commercial. If Progress Energy moves forward with the project, customers' bills will begin to increase substantially during the years just before the plant goes online to cover construction costs.

In 2016, average customers will pay four times the roughly $5 per 1,000 kilowatt hours of usage they pay now for the plant, and in 2019, it will be 10 times the amount, which could potentially cripple small businesses struggling through the bad economy.

"We had said from the beginning that the proposed project would be unaffordable for consumers," said James Brew, attorney for White Springs Agricultural Chemicals. "It's essential to look at it and fully take in the magnitude of the ratemaking train wreck that we're heading toward."

In addition to the cost for the proposed Levy nuclear plant, customers also are paying for costs related to Progress Energy's broken Crystal River nuclear reactor.

That reactor has been offline since September 2009 when it was shut down for a major maintenance and upgrade project. During the work, Progress discovered a gap in the reactor containment wall that needed repair. Workers later discovered a second gap in the containment wall just as it was set to go back online last spring.

It remains idle and won't go back into service until at least 2014.

This year, Progress Energy customers have been paying 54 cents per 1,000 kilowatt hours of usage to cover upgrade costs for the Crystal River reactor.

During Tuesday's hearing, the utility and the consumer advocates agreed the 54 cents should be lowered to 18 cents.

Ivan Penn can be reached at ipenn@sptimes.com or (727) 892-2332. Follow him on Twitter at twitter.com/Consumers_Edge and find the Consumer's Edge on Facebook.

What will happen next?

The Public Service Commission's staff is expected to make a recommendation on the Levy County plant charge to commissioners on Oct. 12. The commission will review Tuesday's testimony and make its decision during the Oct. 24 work session.

Public Counsel: Progress Energy should stop charging customers for Levy County nuclear plant 08/16/11 [Last modified: Wednesday, August 17, 2011 6:14pm]
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