In 2006, the Florida Legislature passed a bill that included a provision allowing investor-owned utilities such as Progress Energy to charge ratepayers for construction costs for new nuclear plants before the plant is built and delivering power.
I voted for the legislation based on the information and analysis of costs provided at that time. But cost estimates we were provided in 2006 have escalated three to four times to what they are now.
As I see the law's consequences to Florida families and businesses, I've changed my mind about the wisdom of such a policy. It is bad for consumers and bad for our state. This is why I am the prime sponsor of SB 740, which would repeal the advanced cost recovery for new nuclear power plants, such as are being proposed by Progress Energy in Levy County and at Florida Power & Light's Turkey Point plant near Miami.
Protecting consumers should not be a partisan issue, and that's why state Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, has filed a similar bill, HB 4301.
As a staunch advocate for consumers, I believe that protecting our citizens' pocketbooks, particularly in these trying economic times, is of the utmost importance. In Florida, allowing utilities to recover the costs of a new power plant before the plant is placed in service and regardless of whether such a plant is ever even completed is unfair to consumers and bad public policy. Moreover, while it shifts the risk from private companies to ratepayers, utility shareholders still benefit from all the profits — in this case a guaranteed rate of return on their capital expenditures.
When I originally supported the advanced cost recovery, I never thought the Florida Public Service Commission would turn a blind eye to the high risks associated with such capital-intensive and complicated projects. I know that my fellow lawmakers did not intend to give utilities a blank check, but that is in essence what has happened.
According to Progress Energy filings with the PSC, an average customer would see an estimated increase of nearly $50 per month per 1,000 kilowatts of power by 2020 from the Levy County plant. Check your bill, because many people use 2,000 kilowatts or more. Naturally, larger electricity users, such as businesses and industrial users, will pay even more. Those on fixed incomes, especially Florida's senior citizens, will have a difficult time adjusting to such increases.
Just recently, the PSC voted once again in favor of the utilities and against these diverse constituencies. In spite of the fact that the utilities haven't even committed to actually building the new reactors, the PSC just approved an additional $282 million in cost recovery for Progress Energy and FPL.
I am one who has traditionally supported nuclear power projects. But these dicey investments ought to be the responsibility of utility shareholders and their investment partners who profit from them, not the average ratepayers who are already struggling to pay their monthly utility bill or keep their business afloat.
Why should people pay now for something that may never benefit them? Who would ever agree to provide an interest-free loan to someone (in this case, multibillion-dollar utilities) who cannot guarantee that a product will even materialize?
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By further allowing utilities unrestricted ability to pass on the costs of new power plants, policymakers are placing undue financial burden where it doesn't belong. Every dollar a citizen or business keeps in their pockets instead of sending to the power companies is a dollar that can help strengthen the Florida's economy.
It is the duty of lawmakers to protect our consumers and let corporate risk be appropriately placed where it belongs — with the shareholders and those who stand to profit. That's how capitalism is supposed to work. It's time to have it start working here in Florida.
Mike Fasano is a Republican state senator from New Port Richey.