Florida Power & LIght and Progress Energy Florida each have proposed building new nuclear plants and are asking the PSC for approval to charge customers to recover those costs in advance of construction. The Southern Alliance for Clean Energy says both requests should be denied.
The Legislature in 2007 adopted an energy bill that allowed utilities to charge customers in advance for the cost of constructing nuclear plants even if they are never built. That allows utilities to begin working on plants that otherwise would not be built because of their high initial costs, Florida Power & Light Officials said.
"The cost recovery reduces risk," Steven Scroggs, a senior director at FP&L, testified. "It also provides a pay-as-you-go opportunity rather than deferring that and building up cost for our customers. It's a better deal for our customers."
Florida Power & Light proposes building two new nuclear units at its Turkey Point plant in Dade County for $12 billion to $18 billion. Progress Energy proposes building a $17-billion plant in Levy County near the Cross Florida Barge Canal.
Progress Energy says it has spent $243 million on the Levy plant between 2006 and 2008 and expects to spend more than $500 million in the next two years, according to PSC staff. The company is asking for $6.69 per month from the average utility customer in 2010 to pay for the pre-construction costs and for upgrading -- technically called "up-rating" -- its Crystal River nuclear reactor.
Florida Power & Light is seeking a 67-cent monthly charge in 2010 going up to $7.87 in 2017, Scroggs said. The company also is upgrading existing nuclear units at Turkey Point.
The utility is examining the cost each year and making decisions based upon a "step-wise" process, said utility spokesman Mayco Villafana. He said utility customers will save more than $1 billion per year by not using more expensive sources of energy.
Mark Cooper, a witness for the Southern Alliance for Clean Energy, said energy costs for alternative sources of energy, such as natural gas, have fallen along with power demand while the cost of nuclear projects has risen.
"As a result, the financial risk of these plants has grown dramatically," he testified. "Moody's (investment rating firm) now considers the decision to build new nuclear reactors a quote, 'bet-the-farm' decision."
Members of the Southern Energy Network said they drove from Orlando on Tuesday to protest against nuclear with signs outside the PSC building.
"Local rate-payers are not even told they will have to do it (pay in advance for the plants)," member Jessica Burris said. "So it's not a fair way to go about it. They don't even know about the environmental and financial risks associated with nuclear reactors."
(Story and photo copyrighted by Bruce Ritchie and FloridaEnvironments.com)
This looks much like the ill fates WPPSS project in Washington State in the 1990's, when ended with the largest bond default in history and 4 abandoned nuke sites with partially build reactors.
ReplyDeleteDemand growth was forecast at 10% but it didn't materialize because of efficiency and faulty population estimates. Florida is now experiencing out-migration. Solar is advancing rapidly.
The WPPSS plants were being built with "cost plus" contracts that allowed the utilities to build the plants and pass on costs plus a guaranteed profit to the consumer. Again, eerily similar to Florida's situation with utilities allowed to pass on costs before construction is even begun.
The Legislature should repeal the law enabling "advance cost recovery" and fund more solar instead.