Only in Tallahassee is it considered acceptable to pick consumers' pockets and profit from a suspect business plan. The Florida Legislature adjourned without seriously reviewing a flawed 2006 law that allows electric utilities to bill customers for nuclear plants that may never be built. A financing scheme that initially seemed plausible has proven to be terribly unfair, leaving Progress Energy customers with more than $1.1 billion in bills and a real possibility of nothing to show for their money. For legislative leaders to not respond — particularly in these tight financial times — is irresponsible.
The so-called nuclear recovery law was pitched as a way to add cleaner, cheaper power generation in a rapidly growing state. Customers would pay a little bit each month toward building the very expensive plants in order to avoid being saddled with big bills for construction once they opened. But in hindsight, it was also a way for the power companies to avoid scrutiny from shareholders or Wall Street bankers. With a guaranteed revenue stream and a major loophole in the law, the pressure to perform evaporated.
As the Tampa Bay Times' Ivan Penn reported last Sunday, the law was not a limited authorization to pass nuclear planning and building costs to the consumer. It allows a fee that includes a profit margin for the utility — regardless of performance. By one estimate, Progress Energy is already entitled to keep at least $150 million in revenue from this scheme even as it has delayed construction of its proposed Levy County plant by at least five years and announced that costs have quadrupled. The company even delayed some fee recovery it was entitled to, proclaiming it was just trying to help its customers. But even that decision will end up profiting Progress Energy.
Beyond the loophole, there is a compelling argument that building the Levy nuclear plant may no longer make sense given the current energy market. The assumptions that made the 2006 law seem more reasonable at the time have been turned on their head with slower growth in energy consumption, advances in alternative energy, continued low-cost natural gas and less political pressure to reduce greenhouse gas emissions.
Yet legislative leaders stubbornly and arrogantly refused to reconsider the 2006 law and its twisted incentives — even as a growing number of former legislators who voted for the bill said they had no idea what they were doing. During the recent session, Senate majority leader and energy committee chairman Andy Gardiner, R-Orlando, repeatedly refused a request from Sen. Mike Fasano, R-New Port Richey, for a committee hearing on the issue. Gardiner's claim that the law saves consumers money is so 2006. That now seems like an incredible long shot.
Gov. Rick Scott should ask legislative leaders to take another look, and incoming House Speaker Will Weatherford from Pasco County should insist on it. His constituents are among those Progress Energy customers paying for a nuclear plant that may never be built while the utility still profits.