Duke Energy Florida under increasing fire during pivotal week

Duke has been collecting $3.2 billion from its 1.7 million Florida customers for two failed nuclear projects with much of the money paid through the "nuclear advance fee''. [CHERIE DIEZ | Times]
Duke has been collecting $3.2 billion from its 1.7 million Florida customers for two failed nuclear projects with much of the money paid through the "nuclear advance fee''. [CHERIE DIEZ | Times]
Published Sept. 30, 2014

In a pivotal week for Duke Energy Florida, state lawmakers are targeting the utility with a series of proposals to bolster consumer protection and prevent unbridled spending of ratepayer dollars.

State Sen. Charlie Dean, R-Inverness, on Monday announced the latest effort that would end the increasingly controversial "nuclear advance fee" that allows utilities to collect from ratepayers for new plants before they produce power.

Duke has been collecting $3.2 billion from its 1.7 million Florida customers for two failed nuclear projects with much of the money paid through the fee. Neither nuclear project will provide a kilowatt of electricity for the billions customers are paying.

Dean also intends to file a bill to remedy billing problems Duke caused customers during a rerouting project for the utility's meter reading system. Duke is refunding $928,000 to 165,000 customers because the change in the system had the "unintended" consequence of bumping them into a higher rate tier.

"I look forward to working with my colleagues in the Florida House of Representatives and the Florida Senate to bring these bills to fruition and to protect our constituents from these practices," Dean said in a news release.

Dean's announcement came a day before Sen. Jack Latvala, R-Clearwater, Pinellas County's most powerful legislator, and Rep. Kathleen Peters, R-South Pasadena, are scheduled to announce legislation to rein in Duke and the Public Service Commission.

They are joined by Sen. Wilton Simpson, R-Trilby, who on Friday threatened to file his own legislation after a Tampa Bay Times report last week. That report pointed to decisions the PCS will make on Thursday about Duke and hundreds of millions of dollars more of ratepayer money.

In particular, the PSC is deciding whether to approve $1.5 billion for a natural gas plant Duke wants to build in place of the failed nuclear projects.

The commission also will consider a request by consumer advocates to order Duke to credit $54 million to customers immediately for nuclear equipment that was never produced.

Duke will have collected all of the money for the equipment from its customers by the end of the year through the nuclear advance fee. It had planned to use the equipment for the now canceled Levy County nuclear project.

Duke canceled the project last year after it proved too expensive to build, though customers continue to pay the expenses related to the project.

The $54 million was for equipment Duke's contractor, Westinghouse Electric Co., never produced.

Duke says it will credit the $54 million, if it can get it back in a lawsuit against Westinghouse. Westinghouse is counter-suing Duke for $512 million for canceling the Levy contract. If Duke loses the case, customers could face another half-billion dollars in expenses for the Levy project.

Simpson and Sen. Jeff Brandes, R-St. Petersburg, wrote the PSC, urging commissioners to order Duke to refund the $54 million to ratepayers.

"I called on the Public Service Commission to stand with consumers and compensate ratepayers for fees," Brandes wrote on Twitter.

Lawmakers are increasingly saying Duke has for too long picked the pockets of its 1.7 million Florida customers.

"Thursday, (the PSC) will have yet another chance to prove that they are worthy of the immense responsibility entrusted to them," said Rep. Dwight Dudley, D-St. Petersburg, who has been a leading opponent of the fee.

"While I am under no illusion, I remain hopeful that the PSC will finally live up to their name by serving the public, rather than private, interest," Dudley said.

Dean's effort to repeal the fee is not the first. Dudley tried. His efforts were preceded by Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, and former Sen. Mike Fasano, R-New Port Richey.

An end to the advance fee would halt all efforts in the state to produce nuclear power in the near future, though most proposed reactors have been delayed or canceled largely because of cheap natural gas.

And some 17 environmental groups announced Monday that they are considering a lawsuit to prevent the U.S. Nuclear Regulatory Commission from approving any new licenses until the federal regulator resolves how to safely dispose of nuclear waste.

Duke and Florida Power & Light are seeking operating licenses to build two reactors each. Because Duke has spent hundreds of millions in ratepayer money on Levy, the state supports its attempt to obtain its license.

The license is good for 20 years and could be amended for future use if Duke changed its mind about constructing new reactors.

Duke also elicited public outcry over its handling of changes to its meter reading system.

Duke sought to make its routes more efficient, but the changes led to additional charges to 165,000 customers. The changes also extended some customers bills by up to 12 days, increasing their monthly bills by $100 or more.

Contact Ivan Penn at or (727) 892-2332. Follow @Consumers_Edge.