Column: Another power company power play for customers' money

Florida Power & Light is pursuing two new reactors at its Turkey Point facility.

Times files

Florida Power & Light is pursuing two new reactors at its Turkey Point facility.

After several years of public unrest and fierce debate, the fate of Florida Power & Light's pursuit of two new nuclear reactors and controversial high-voltage transmission lines at the Turkey Point facility in South Florida is squarely in the hands of Gov. Rick Scott and the members of the Florida Cabinet at their next meeting Tuesday.

While much press attention has been given to the role that the Florida Public Service Commission has played in approving nuclear projects, many are unaware that the governor and Cabinet compose a little-known body called the Power Plant Siting Board, which must approve these projects for them to move forward. Unfortunately, despite massive shows of public disapproval and consistent opposition from city officials in the areas that would be most directly affected, the governor's staff is encouraging the Cabinet to approve FP&L's proposal.

I won't focus here on all of the concerns being expressed by local business owners that are being dismissed by this large utility monopoly. I also won't go into the very legitimate health concerns that the public is expressing because this plan would place a row of high-voltage power lines transmitting power from two nuclear reactors close to a mile from residential areas. I also won't go into the environmental impacts being expressed by many.

Each of these range of concerns merits serious attention, but as a consumer watchdog group the Florida Alliance for Consumer Protection's main issue with these proposals is the continued use of early cost recovery as a method to fund the nuclear plants themselves.

One of the problems with allowing companies to fund projects this way is that it shifts all of the risk in building a nuclear plant to consumers while shielding companies from the consequence of such investment. Companies make a substantial sum of money if they pull out of a project and make even more through interest if a project is delayed or has major cost overruns, which is always the case with the construction of nuclear reactors. Companies face no penalty if they pull out of a project or if projects run billions of dollars over initial projections. They simply make more money at consumer's expense.

Another big problem with early cost recovery is that there's no guarantee that consumers will get anything for what they pay for. Let's face it, the industry has a horrendous track record. Late last year, after collecting money from ratepayers for years, Duke Energy finally pulled the plug on their Levy County nuclear plant.

As detailed by the Tampa Bay Times, Progress Energy and then Duke had argued for years that being allowed to collect money from customers far in advance would allow them to build the plants faster and more cheaply, which would translate to cost savings for consumers. In the end, there was no cheap energy, customers still had to pay $1.5 billion on a project that would never be built and Duke Energy was able to keep $150 million in profits for essentially doing nothing for their customers.

Yet another issue with early cost recovery is the lack of transparency around how much consumers are paying toward these fees on their monthly bill. Consumers are essentially being kept in the dark and attempts to require more price disclosure are quickly squashed by the industry in the Legislature.

Scott and Cabinet members will review the Turkey Point reactors and the proposed transmission lines at the coming Cabinet meeting. We urge them to consider the fact that FP&L has not even been certified to move forward with the project by the NRC and may never receive that approval.

The utility will inevitably argue that it needs a thumbs-up from the Cabinet to get that certification, but it's a terrible idea to allow a utility company to collect money from customers to build plants that have not even been certified yet. They are in no position to even begin construction.

At the very least the Cabinet should delay this decision until that certification is issued. We would rather see the Cabinet reject this proposal altogether, given the recent track record of companies failing to follow through with plans at customers' expense. However, we think that postponing a vote until there's a reasonable chance that the company can begin building the plant is a fair request.

Brad Ashwell is the legislative director for the Florida Alliance for Consumer Protection. FLACP.org.

Column: Another power company power play for customers' money 05/09/14 [Last modified: Friday, May 9, 2014 6:02pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...