It's a big week for many Floridians, their wallets and their energy bills.
On Thursday, the Florida Supreme Court takes a closer look at a 2006 state law that may go to the very top in my personal Guinness Book of Stupid Legislation.
That law forces Florida customers to pay for their utility's proposed nuclear power plants long before they are built or begin operation. If the utility decides not to build the plant, it can keep much of the money it has already squeezed out of customers. We're talking hundreds of millions of dollars already.
Both Progress Energy (now owned by Duke Energy) and Florida Power & Light are using this "advance fee" to charge their customers for planned nuclear plants that won't start operating (if they do at all) until 2022 or later.
Progress Energy whines that this financing method — approved six years ago by the best state Legislature wealthy utility company campaign contributions can buy — is the only practical way to finance new nuclear power plants.
Really? That would be laughable if the fees forced upon Floridians were not so onerous and likely to become more so in the coming years.
The advance fee forced down customer throats by state law is "practical" only because Wall Street financiers of nuclear power plants won't touch such projects. Too pricey. Too risky. Too – wait for it – uncompetitive.
In other words, the free market's already given a huge thumbs down to financing nuke plants. So the industry's "practical" solution is to convince the dull-witted Florida Legislature to let utilities suck the fees directly from Florida customers years in advance.
Had utilities bothered, they might have found less insane ways to pay for nuclear plants.
• First, power companies wanting to build nukes could have formed consortiums that could share the cost and spread the risk of building new plants. The group would share in the eventual "cheap" electricity the nukes would produce.
• Second, utilities could have been more forceful in lobbying the federal government to deliver on its promise to provide cheap, guaranteed loans to help finance nuclear power plants. Why would the feds do that? Because the U.S. government knows that to meet future national energy demand and to cut air pollution, electricity will have to be generated from a broader range of sources that include natural gas, solar, and, yes, even nuclear.
• Finally, utilities that want new nuclear power could have scaled back their ambitions. By doing so, they would have shrunk the price tags on nuclear projects. Case in point: Progress Energy wants to build two nuclear units at its proposed Levy County site for a total project cost of $24 billion (and counting).
How about building one Levy nuclear unit instead of two to bring down that sky-high price tag?
The projected demand for new electricity in Florida is far less now than was anticipated back in the pre-2006 boom times. Two Levy County nukes may be overkill given the state's diminished growth expectations.
So what will the Florida Supreme Court do about advance fees?
If it honored the spirit of free markets and competition, it would don steel tipped boots and kick such a bad idea into the trash bin. There are other ways.
Contact Robert Trigaux at [email protected]