Americans in many states depend entirely on high-carbon fuels to produce their electricity. If the federal government imposes a price on carbon dioxide to combat global warming, utility customers in those states will face significant increases in their electricity bills. In Florida, the cost should be more manageable. Twenty percent of our electricity comes from emissions-free nuclear power, and that figure is poised to increase if the Legislature maintains its commitment to nuclear power.
In a carbon-constrained world, emissions-free sources of electricity are vital to Florida's economic future. Florida has no hydroelectric resources to speak of, our investment in solar power is just beginning, and wind has yet to win approval at the local level despite its many benefits. That leaves nuclear power as the best option for generating massive amounts of low-carbon electricity.
The Florida Legislature enacted a wise policy to encourage additional nuclear energy in Florida. The legislation allowed utilities to recover from customers some of the front-end costs of building a nuclear plant as they are incurred, rather than waiting 10 years until the plant is in service. By avoiding huge financing charges that would be assumed if they had to borrow money in the credit market, utilities will not have to pass those costs on to customers. It's the difference between paying $50 cash for dinner now or putting it on your credit card and paying $10 a month for a year, which would more than double the cost.
That's why I'm opposed to efforts in the Legislature to repeal pay-as-you-go rules for nuclear power. If utilities are not allowed to recover some of their costs now and instead have to borrow more money at exorbitant rates, they will lose their incentive to build the nuclear units the state needs to ensure a prosperous future.
It is tempting to play "kick the can down the road" during these challenging times. However, if Florida's utilities cancel their plans for new nuclear units because of short-term legislative policies, lawmakers will have to explain why constituents are facing higher electric bills and Florida is losing thousands of jobs and millions of dollars in tax revenue.
Given the increasing need to react to the governor's call for cleaner, more sustainable sources of energy coupled with the need to meet a growing demand for power across the state, it is necessary to ask utility customers to pay a modest increase on their monthly electric bills now to ensure that new nuclear plants can be built. There is never a good time to raise rates on customers. Yet in doing so now, these customers will save $2 billion a year in fuel costs. The alternative is to leave Florida increasingly dependent on fossil fuels such as natural gas.
The choice we would all prefer — paying nothing — is simply not an option. Electricity is not free, and the state must make responsible choices to ensure a secure energy future. The Legislature only meets for 60 days. Considering the serious issues facing the state in this time of economic crisis, repealing a good bill hardly seems like the right priority.
Floridians already enjoy tremendous economic benefits from our existing nuclear facilities. Unlike so many other Americans, we do not have to start from scratch. We are investing in more electrical generating facilities that are clean and safe, use a fuel that is stable in price and in supply, and that do not send billions of dollars to unfriendly countries.
Now is the time to put our foot on the accelerator, not slam on the brake.
Barney Bishop is president and chief executive officer of Associated Industries of Florida.