Florida regulators gave their blessing Friday to higher electricity rates to cover advance costs for building a nuclear power plant in Levy County.
With a 3-1 vote, the Florida Public Service Commission okayed Progress Energy Florida's request to recover some $207 million in up-front costs. According to the Associated Press, Progress can charge residential customers $5.86 a month — an increase of about $1.55 — per 1,000 kilowatt hours to go toward the up-front costs. Residential customers now pay $127.31 for 1,000 kilowatt hours, enough electricity to power a smaller Florida home for about a month.
The PSC also agreed to allow Florida Power & Light Co. to charge 67 cents per month — a $1.59 decrease, AP reports, in what customers are paying — for the first 1,000 kilowatt hours to cover costs for a new nuclear power plant in South Florida.
Both companies were given slightly less than they had requested, AP said. The rate changes take effect Jan. 1.
Florida is one of a few states whose legislature authorized power companies to charge customers in advance to pay for new, expensive power plants. Critics complain state lawmakers merely dumped the expensive burden of financing high-cost plants on to utility customers, and off the power company that normally would borrow money to build a new plant. Shareholders who typically take on such risks as investors in the company are now spared that exposure.
In a statement, PSC chairman Matthew M. Carter II said nuclear power helps diversify the types of fuels utilities use to generate electricity and will save Florida residents money on future utility bills.
"Utilities have to begin spending now to meet future power needs that will keep the lights on for us, our children and our grandchildren at prices we can afford," Carter stated.
PSC Commissioner Nancy Argenziano was the lone vote against the early cost recovery. The Levy nuclear plant is not scheduled to open until after 2017.
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