Senate panel advances bill to put brakes on nuclear fees

Published April 9, 2013

TALLAHASSEE — For the first time in seven years, a Senate committee has stood up to the state's utility companies and unanimously passed a bill that would weaken a law that has allowed the companies to charge customers for nuclear projects before the projects are built.

The Senate Communications, Energy and Public Utilities Committee voted unanimously Monday for SB 1472, which would impose strict new requirements on utility companies by demanding that they obtain a license to build a power plant before they can continue to charge customers.

The bill is opposed by the state's largest utility companies, which for years have persuaded legislators not to change the 2006 law known as the Nuclear Cost Recovery Clause, even though costs of the plants have quadrupled and their construction plans were postponed.

"This is a responsible piece of legislation that we think puts reasonable parameters going forward," said Sen. John Legg, R-Trinity, one of the bill's sponsors.

The measure was hailed as a good first step by consumer and clean energy advocates.

"What is being proposed could be strengthened," said Susan Glickman of the Southern Alliance for Clean Energy, which has been fighting the law for years and is challenging it in court.

The 2006 law was intended to encourage the construction of expensive nuclear power plants by allowing companies to shift the risk of financing the projects from shareholders to ratepayers.

Utilities argued that the arrangement would save customers money in the long run. But the law includes no benchmarks or deadlines and allows the companies to pocket unlimited amounts of cash even if the projects fail.

The proposal — by Tampa Bay area Sens. Legg, Wilton Simpson, Jack Latvala and Jeff Brandes — originally said the law would be repealed by 2016 if power companies hadn't made significant progress on their proposed nuclear plants. The committee removed that provision on Monday and replaced it with a set of benchmarks proposed by Simpson for companies to meet in order to continue collecting from customers.

Among them: Only costs associated with obtaining the license could be recovered until the license is obtained, and after that, the company would have to seek approval from the Public Service Commission.

Another Simpson amendment passed by the committee would require Progress Energy Florida to pass a "prudency review" and justify why its proposed nuclear reactor in Levy County is still a good idea.

The Levy County project has come under fire after the project ballooned in cost from an original estimate of about $5 billion to $24 billion. Customers have paid $1.5 billion for the costs, and there is no guarantee the project will get built. Progress Energy has been able to pocket $150 million in profits from the project.

The committee also adopted an amendment by Sen. Anitere Flores, R-Miami, that removed a provision in the bill that would have required the utility companies to pay back customers if they canceled the proposed nuclear projects. Flores said the change was needed to encourage companies to abandon a failed project rather than continue pushing it to avoid paying back the utility fees.

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"I wouldn't want to provide any incentives for utilities to make decisions that may sound good in the short term but may end up costing the consumer more," she said.

The bill appears to be on the fast-track in the Senate, where it faces a hearing before the Senate Community Affairs Committee, which Simpson chairs, and then goes to the Senate floor.

Susan Clark, an attorney representing Florida Power & Light, Progress Energy, Gulf Power and Tampa Electric, said the state's largest utility companies oppose the bill.

"We simply urge you not to be hasty in amendment or repeal of that legislation," she said. "Minor changes to the statute can impose enormous risks and put nuclear projects in jeopardy."

A similar bill is scheduled to be heard by the House Energy and Utility Committee on Thursday, and senators plan to propose an amendment to the budget on Wednesday that would require the PSC to conduct its "prudency review" of the Progress Energy plant regardless of whether SB 1472 moves forward.

"I think there's a 50 percent chance we'll get something done this year," Latvala said.