Facing outrage from customers and opposition from Tampa Bay legislators, Progress Energy may consider a compromise to soften the nuclear wallop expected to hit electric bills in January.
Progress Energy won approval to raise bills 25 percent to pay for higher 2008 fuel costs and for early costs of its $17-billion nuclear project in Levy County. A 2-year-old state law allows the St. Petersburg utility to charge customers for the nuclear project years before it starts producing power.
State Sen. Mike Fasano, who voted for the nuclear cost legislation, now says that his vote was a mistake. He did not realize just how high bills would go, he said. He plans to introduce legislation next year that would repeal or modify the law.
"If I had it do over again, I would not vote for it," Fasano said.
Jeff Lyash, president and chief executive of Progress Energy, said Thursday afternoon, "We're not at all opposed to a dialogue as to whether there are alternatives that could meet all of our objectives, and lower the short-term price to the customer."
Under the 2006 law, Progress Energy customers pay for certain construction and financing costs while the project is being built. That acts almost like a down payment, reducing borrowing costs, Lyash said. If customers don't pay as they go, the interest will raise the cost significantly.
If the law is repealed, Lyash said, "We would not be able to build this project."
State Sen. Lee Constantine, the Altamonte Springs Republican who sponsored the nuclear bill, said he still believes the law is necessary. However, he did not foresee the severity of the impact on customers.
"Clearly, we never envisioned that it would be this much just two years later," Constantine said.
Constantine wants to change the law so that the Public Service Commission has the latitude to spread the costs out over time to avoid the "rate shock" of sharp increases.
The nuclear charge will add about $13 a month to the bill of the average residential customer, or about 10 percent more than today's bill.
The rest of the 25 percent increase pays for fuel. Under state law, utilities are not allowed to profit from fuel. It is a pass through to consumers.
Asjylyn Loder can be reached at [email protected] or (813) 225-3117.