1. Opinion

Editorial: Utility customers keep losing

Duke Energy has collected $1.5 billion in advanced fees for the closed Crystal River nuclear plant that it broke, above, and a proposed nuclear plant for Levy County that may never be built.
Duke Energy has collected $1.5 billion in advanced fees for the closed Crystal River nuclear plant that it broke, above, and a proposed nuclear plant for Levy County that may never be built.
Published May 1, 2013

Ron Vallario figures if he ran his family's business the way Duke Energy runs its nuclear power program, he would be arrested for stealing his customers' money. The second-generation owner of Superior Auto Body in Pinellas Park estimates he has been forced to pay $7,500 toward $1.5 billion in advanced fees that Duke Energy has collected for the closed Crystal River nuclear plant that it broke and a proposed nuclear plant for Levy County that may never be built.

Yet this week in Tallahassee, it is Duke Energy (which acquired Progress Energy last year) and Florida Power & Light, the state's largest utilities, that still get all the breaks. And virtually no one speaks up for the ratepayers — not Gov. Rick Scott, not state legislators and certainly not the lapdog Public Service Commission.

The Senate's tepid response to the Duke Energy debacle, to require more oversight in the future on advanced nuclear fee collections, has been further watered down in the bill passed by the House on Wednesday. Even then, the fate of that legislation is unclear with two days left in the session. Meanwhile the submissive PSC heard Duke Energy lawyers argue this week that all of the additional costs tied to the shuttered Crystal River plant should be paid by utility customers while company shareholders should not have to pay a dime.

Just how tilted against the consumer is the playing field in Tallahassee? Rep. Dennis Baxley, R-Ocala, complained on the House floor Tuesday that the poor little electric utilities are being unfairly criticized and expressed how grateful he is that they keep the lights on. Baxley said critics forget how good the companies are about restoring power after a hurricane. Rep. Mike Fasano, R-New Port Richey, was quick with some facts: These electric companies are monopolies and are allowed to pass any storm-related costs directly to consumers.

Indeed, if state leaders were on the side of consumers, the Legislature would repeal the poorly written 2006 law that created the nuclear advance fee as Fasano and Rep. Dwight Dudley, D-St. Petersburg, have proposed. The mess that Duke Energy inherited reflects all that is wrong with this no-risk scheme, by pocketing $150 million in profit while consumers have nothing to show for it. The recent recession reduced the projected demands for electricity, and the advent of fracking and the resulting drop in natural gas costs have made nuclear's upfront capital costs even more unappealing. The estimated cost of the Levy County nuclear plant has mushroomed from $5 billion to $24 billion.

But from the outset, four Tampa Bay senators pushing reform have aimed lower than outright repeal. The bill, SB 1472, just seeks to tweak the current law by lowering the guaranteed rate of return — now an astonishing 8.5 percent — and giving the PSC more authority to scrutinize purchases and the fees year-to-year. The idea that the PSC would stand up to Duke Energy and Florida Power & Light is a fantasy unsupported by the record.

The Senate also had proposed requiring utilities in the future to refund their guaranteed rate of return on nuclear fees if a project is never built. The House removed that reasonable provision on Tuesday. The chamber even rejected an amendment from Dudley to require utilities to spell out nuclear advance fees on monthly bills. The utilities have no problem reaching in consumers' pockets, but they don't want consumers to know for how much.

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So consumers will remain in the dark on their individual contribution to this corporate welfare unless they complain to a legislator, as Vallario did. Dudley consulted with the PSC to estimate Vallario's costs after receiving copies of the business' power bills.

Once again in Tallahassee, utilities are winning and the consumers are losing.


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