Duke Energy, the parent company of Progress Energy Florida, advocates for the continuation of the advance nuclear cost recovery fee/tax. I do not.
Advance nuclear cost recovery is a mechanism through which a power company can bill customers in advance for the future construction of a nuclear power plant, thus reducing its own financial commitment to the project. Over the course of an entire construction project, hundreds of millions of dollars may be pulled from customers who have no ability to refuse paying.
From the utility's point of view it makes perfect sense. Any industry that wants to expand its physical plant must put up capital to do so.
Generally, building new facilities or expanding existing ones is a risk that a business must take. Will the future market be able to sustain the growth? Almost all companies don't have the luxury of a state regulator allowing the company to tack extra fees onto its customers' bills to pay for said expansion. Power companies are different.
From the customers' point of view this extraordinary fee/tax is nothing but a state-level boondoggle, a dig in the wallet, a deduction from the bank balance, all to reduce the exposure of the utility. When Duke/Progress Energy announced earlier this month that the nuclear power plant in Crystal River would be shut down, this question immediately came to mind: What will happen to the advance nuclear cost recovery dollars already collected? It was long feared that if the project went under the customers would be left holding the bag. Will the same thing happen to the almost $1.5 billion already paid out by the Duke/Progress Energy customers?
In an open and free market a company would have to stand on its own two feet and come up with the cash it needs to mount an improvement campaign. Due to the unique regulatory structure under which Florida utilities fall, even investor-owned utilities can share the cost of these improvements with customers.
As we are seeing in Crystal River, customers will never see a return on their forced "investment" in that particular nuclear power plant. What will happen to those dollars if nuclear regulators halt the project? What happens if construction costs run wild? The list of what-ifs is endless.
The utility rests easy knowing it is not bearing the full burden of the cost. The customers don't rest easy because many of them know they may never see the fruit of their hard-earned money that is being billed away from them. And even if the project does one day go online, it will be so far down the road that people who paid into it may no longer be around to enjoy it.
I have fought long and hard to repeal the statute which allows for the collection of advance nuclear cost recovery fees/taxes. Over the years I have filed legislation, I have attempted to amend other bills, and I have spoken with leaders in other states about the dangers of these fees.
I have also spoken endlessly to my colleagues about this bad concept. I am encouraged that the current legislative leadership has publicly stated that this may be the time for the House and the Senate to look at the continuation of this fee. It is my hope that enough of my fellow lawmakers agree that it is one of the most consumer-unfriendly cash grabs ever allowed to become law. The time is now to repeal the cost recovery fee/tax. Anything less would be a loss to the ratepayer.
Rep. Mike Fasano, R-New Port Richey, represents District 36 in the Florida House.