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Editorial: PSC again favors Duke Energy over common sense

 
State Sens. Jack Latvala, R-Clearwater, left, and Wilton Simpson, R-Trilby, are among those who have had enough of Florida’s Public Service Commission.
State Sens. Jack Latvala, R-Clearwater, left, and Wilton Simpson, R-Trilby, are among those who have had enough of Florida’s Public Service Commission.
Published Oct. 1, 2014

It's bad enough that Duke Energy customers have to pay more than $1.5 billion for costs tied to a nuclear power plant that never got off the drawing board. To rub salt into the wound, the Florida Public Service Commission is expected this week to reject an effort to refund customers $54 million for nuclear parts that were never produced and that Duke never received for the plant that will never be built. No wonder powerful legislators are crying foul and talking about making changes at the utility-friendly PSC.

Even in the arcane world of utility regulation, this defies logic. Duke paid $54 million to Westinghouse Electric Co. in 2008 and 2009 for nuclear components for the plant that was to be built in Levy County. But the components were never made and never shipped to Duke, which pulled the plug on the nuclear plant in 2013. Now Duke has filed a federal lawsuit against Westinghouse to get the $54 million back, and consumer advocates want ratepayers to be refunded that money now.

This should not be that hard. The 2006 nuclear cost recovery law allowed utilities to charge ratepayers in advance for costs tied to new nuclear plants. The PSC found the $54 million in costs for the nuclear components was a prudent expense at the time, and ratepayers paid for the parts. But since the parts were never made or delivered, why shouldn't ratepayers get their money back now and let Duke fight it out in court? Because Duke, of course, wants to wait until the outcome of the court fight to decide how to proceed. And because the PSC staff, of course, is perfectly willing to let Duke have its way and recommends the commission take no action Thursday.

The PSC staff contends that because the $54 million cost to taxpayers was deemed prudent at the time, it cannot be found now that it was not prudent and refunded. They say that would not be in line with the 2013 settlement with Duke over the nuclear costs and "would be inconsistent with commission practice.'' So once an expense is ruled to be prudent, it is prudent forever even if the nuclear parts that were paid for were never delivered?

As Sen. Wilton Simpson, R-Trilby, wrote to the PSC, the staff recommendation "shows a disconnect with reality and how this situation affects the lives of Florida's families. If the staff's recommendation carries more weight than common sense, please accept this letter as my commitment to file legislation to address this issue.''

Simpson is not the only lawmaker who has had enough of the PSC. Sen. Jack Latvala, R-Clearwater, and Rep. Kathleen Peters, R-South Pasadena, are expected to propose a series of reforms this week. For starters, they should look at how the PSC determines what is prudent beyond accepting whatever the utilities want. They also should look at the PSC rule that Duke hid behind to gouge customers and force them to pay higher rates just because the utility was changing its meter reading system. The public outcry and pressure from legislators forced Duke to backtrack and offer credits.

Gov. Rick Scott, who has received hundreds of thousands of dollars in campaign contributions from Duke Energy and Florida Power & Light, has signaled he has no problem with a PSC that rubber-stamps the whims of utilities. He recently reappointed one PSC member and handed a vacant seat to a Panama City legislator with no background in utility issues as a political gift. Fortunately, some legislators are starting to stand up for their constituents and challenge the status quo. The PSC and its regulatory scheme need an entire overhaul.