The enduring Tallahassee myth that nuclear power is always cheaper has cost Duke Energy customers billions of dollars with nothing to show for it. A new analysis of the long-term cost of the proposed nuclear plant in Levy County — the kind that ideally would have already been done by regulators — should finally change the conversation. The Florida Public Service Commission, long the lapdog of utilities, will soon have clear authority to halt advanced fees for a nuclear plant that will likely never be built. If commissioners don't take action, they do not deserve reappointment.
The analysis in today's Tampa Bay Times, as explained by Ivan Penn, should leave no question in any regulator's or elected state official's mind that in today's energy economy, it is only the utilities that benefit from the 2006 state law that allows them to shift preconstruction nuclear costs to consumers.
The Times found that under no reasonable assumption does building the nuclear plant in Levy County make economic sense over the next 60 years compared with building two natural gas plants, each with a 30-year lifespan. None.
Even when the volatility of natural gas prices is taken into consideration, including Duke Energy's higher-than-government estimates of fuel costs, the nuclear plant is far costlier. Even when the price of adding pollution controls — which are not yet required — to the natural gas plants is included, the nuclear plant is still more expensive. And even lowering the rate of return utilities can earn from the advanced nuclear cost recovery fee — as the 2013 Legislature has proposed — doesn't span the gap.
As suspected, the only real winner from building nuclear instead of natural gas? Duke Energy and its investors, who could enjoy up to 10 times the profit over 60 years than they could from operating two consecutive natural gas facilities producing the same power.
The only way nuclear ever looks cheaper is if the construction costs are ignored. That's like saying a family should pick a new car based strictly on the cost of gas, not the sticker price.
With the aid of the Legislature, Duke Energy, which bought Progress Energy last year, has already shoved more than $1.8 billion in fees onto its customers for two projects: a proposed Levy County plant that Wall Street believes will never be built; and a planned expansion of the Crystal River plant that was ultimately shuttered after a botched do-it-yourself repair job.
Yet Duke Energy, along with Florida Power & Light, once again thwarted efforts to repeal the fee in the 2013 legislative session. Tampa Bay lawmakers did win a change that opens the door for more scrutiny by the PSC. Gov. Rick Scott is expected to sign the law that expressly gives the PSC authority to deny requests for fee collections if the project's long-term economics make no sense.
It's time for elected officials in Tallahassee to be honest about who is benefitting from the nuclear fee and stand up for the Floridians who put them in office. It's time for the PSC to embrace its role as a protector of consumers, not industry. It's time for the fleecing to stop.