State Rejects FPL Bid To Charge Users $49 Million For Nuke Plant It May Never Build

Nov 06, 2017 No Comments by

In a rare rebuke to Florida Power & Light, state utility regulators just rejected the company’s request to charge $49 million more for the planning of a nuclear reactor that the company cannot say will ever be built.

The 4-1 decision by the Florida Public Service Commission came after months of hearings in which the state’s largest utility urged regulators to let them charge customers in the future for costs of the postponed project — even without filing a “feasibility analysis” that would show if and when they intend to build two new nuclear reactors at their Turkey Point facility in south Miami-Dade County.

 

“This is a hard issue,”’ said Commissioner Julie I. Brown, chair of the five-member panel, who voted to reject the request. “The whole country is watching the new fleet of nuclear deployments constructed or to be constructed around the country.”

FPL has been planning the addition of two new nuclear power units — Units 6 and 7 — at the Turkey Point site on Biscayne Bay since 2008. Using a “nuclear cost recovery” law it helped to push through the Legislature in 2006, it is allowed to charge customers in advance of the project’s construction — $282 million for the planning and licensing costs so far.

In 2013, the Florida Legislature added a new requirement that asked utility companies to prove that a nuclear project is feasible before the PSC gives the company permission to move into the pre-construction phase of the project. Until last year, FPL filed the required feasibility analysis every year, detailing its commitment to build the $20 billion project, and the PSC routinely gave the company approval to charge customers in advance for the work.

 Last year, FPL asked the PSC to waive the study on the same day it was due, arguing that the feasibility report “would impose a substantial hardship upon FPL and violate principles of fairness.” This year, it argued that another report was not needed.

Brown noted that the 2006 law intended to encourage nuclear reactor development but, since then, much has changed as nuclear projects across the country have been put on hold as the cost and feasibility of the technology are questioned.

 

“Whether this has worked out for customers is a question everyone has,” Brown said. “Whether Turkey Point 6 and 7 are going to come online, is feasible, is realistic, is a question that we as regulators have and, like it or not, nuclear power has been very important to our fleet for many decades. … I’d like to think 6 and 7 would come online, but based on the fact that we did not have a feasibility study for this year’s proceeding, it’s hard to say that.”

Voting to accept FPL’s request was Gary Clark, Gov. Rick Scott’s newest appointee to the PSC who replaced Jimmy Patronis, who was chosen to serve the unexpired term of Jeff Atwater as state chief financial officer.

FPL initially promised to have the two next-generation reactors go online as early as 2018 and 2020, but in filings before the PSC, it said it’s now not likely to fire up until 2030 and 2032.

At the time FPL applied for the two new reactors in 2008 and 2009, natural gas costs were more than six times higher and the company pursued upgraded reactor designs from Westinghouse, which has since declared bankruptcy.

In May 2016, FPL put its Turkey Point nuclear expansion plans on hold for at least four years but said it expected to get federal approval for its license by December 2017. The decision to postpone the controversial project also occurred as the utility faced increased scrutiny over troubles in the canals that cool two aging reactors at the plant on south Biscayne Bay.

 

“The PSC adopted the recommendation of its staff, which concluded that there was an absence of any forward analysis that demonstrated the project and completing the project is feasible and reasonable — or testing that question,” said James Breman, of the PSC’s Office of Industry Development & Market Analysis.

The commission, however, did approve $47 million in costs associated with licensing and permitting in 2015 and 2016, but also said the company must return another $7.3 million that it collected from customers that it didn’t need.

FPL did not respond to requests for comment about the commission’s rejection of their request. It did comment on a decision by the commission to approve their ability to continue pursuing the license.

 

“We plan to continue pursuing the licenses necessary to have this important option, and we will be reviewing our options for funding the project,’’ said Bianca Cruz, an FPL spokesperson.

Opposing FPL’s proposal were a line of intervening parties that included the Office of Public Counsel, which represents the public in rate cases; the Florida Retail Federation, the state’s largest industrial users of electricity; and the PSC staff, which has recommended against it.

In a letter to the PSC, state Rep. Jose Javier Rodriguez, D-Miami, urged regulators to reject FPL’s request.

 

“This project has been an absolute boondoggle for which FPL customers have already paid over $282 million, for a project with no assurances of ever being completed,” Jose Javier Rodriguez wrote. “As you know, the project and the existing nuclear reactors have been plagued with problems, from overheating cooling canals, to saltwater intrusion into Biscayne Bay, and, most recently, the bankruptcy of Westinghouse Electric Company, which means that the source of the proposed nuclear plant’s nuclear reactors is now unclear.”

Duke Energy Florida has filed a similar petition and that case came before the commission on Oct. 24 and 25.

 

Source: Miami Herald

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