PSC approves rate increase for Progress Energy customers to construct uncertain nuke plants

10/26/10 Seán Kinane
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Today the Florida Public Service Commission elected a newcomer, Arthur Graham, to be chair, instead of outgoing Commissioner Nathan Skop. Skop is the last of four commissioners who were let go after voting down rate hikes for power companies. Graham replaces former chair Nancy Argenziano who resigned early to endorse Alex Sink for governor.

Today the new-look PSC also agreed to allow Progress Energy to keep billing customers for nuclear power plant that may never be built.

For a typical small home, customers will now have a slightly smaller surcharge of $5.53 per month. The Southern Alliance for Clean Energy is critical of building the new nuclear reactors and also of having customers pay ahead of time for the cost. Steven Smith is their executive director.

"A few years ago the utilities, Progress Energy Florida and Florida Power and Light went to the state utility commission, Public Service Commission and requested the ability to start building these nuclear power plants and charging customers for them, whether they ever finished them or not. And what's happened in the interim, the last two years, the demand for the electricity has dropped, issues have come up about the design and engineering of these nuclear power plants and what's ended up happening is that there's a lot of questions about whether these nuclear power plants will ever be built. They certainly won't be built on time, they've delayed them but they continue to charge customers all along and that has ended up being very costly and will continue to be very costly to rate payers. What we did was we have intervened in a case with, where the Public Service Commission is to review these expenditures and ask that they not be granted as 'prudent or wise expenditures' given the continued problems with the nuclear power plants and what has happened now is for the second time the Florida Public Service Commission continues to give utilities, in essence, a blank check to charge millions and millions of dollars to rate payers for building nuclear power plants that will probably never get built, just end up being just a big waste of money at the expense of Florida rate payers. And causing Florida's rates to go up."

Progress Energy Florida was granted that rate increase today by the Florida Public Service Commission. Earlier they granted it to a different company, Florida Power and Light. How much are these rate increases? And how much are these nuclear power plants? How much are they expected to cost if they get built?

"Well, if they were to ever get built the amount of money for these nuclear power plants is staggering. They are now over 20 billion dollars to build these plants. What that means is that we're going to be paying for those rate increases between now and 2020, 2022 and they'll be increased. Right now they're going to go up about 8 dollars addditional a month and then they're eventually going to get as high as 50 dollars additional a month over the lifetime. So it really just defies imagination, given how tough times are in Florida for the regulatory commission, the Public Service Commission of Florida, to just not ask the tough questions to the utilities about the plants, because these plants are in real trouble. But because the legislature gave them the opportunity to charge off these costs early and because the Public Service Commission doesn't seem to have the backbone to really question them what's happening is that rate payers are being taken advantage of by the big power companies."

What type of recourse do consumers have? Can they petition the PSC to take these charges back or is it written in stone?

"Well, what is supposed to happen is that there's...First of all they can ask they're elected officials to remove this law that allows these utilities to charge off these costs early for a plant that hasn't even been built. This is very unusual and very unorthodox for rate payers to have to pay for imaginary plants that may not ever come into existence. Secondly, the Public Service Commission is supposed to provide an annual review of what are quote, unquote, prudent costs, costs that are prudently incurred or wisely incurred. We believe that they need to put their foot down and say 'wait a sec, you're delaying these plants, the plants are already ballooning in more costs, there's really no reason why you need to be spending this kind of money on these plants, charging rate payers. We can delay this until there really is a legitimate need for the power down the road, see what other options available and see whether these nuclear power plants are really the best option'. Unfortuanately the Commission seems to be intimidated by the utilities and unwilling to really take a firm stand against them. The citizens need to make sure that they voice their, let their voice be heard during these elections, and make sure they're communicating with their elected officials and with the Public Service Commission. They are appointed by the governor and approved by the legislature."

And finally, I'd like to ask you about the safety record of nuclear power, specifically about the type of power plant that they're proposing the Toshiba Westinghouse AP1000 reactor design? What can you tell us about that?

"The truth is that nobody knows. There's not one of these things operating in the United States, it's a new design. It was supposed to be worked through the Nuclear Regulatory Commission before the utilities launched into trying to build these things and unfortunately it still hasn't cleared all the hurdles at the Nuclear Regulatory Commission. So, we don't know, I think the jury is still out, there's problems that have come up, it's causing delays, and this is just what causes us to seriously question whether spending 20 plus billion, that's billion with a B dollars on a technology that is not licensed by the NRC, that is not needed in the forseeable future in Florida, and now is continuing to have problems just getting through the engineering and design phase is really something that we want. This is the same old song and dance where we've seen rate payers taken advantage of by big power companies and the elected officials and the regulators failing to really provide the oversight that's necessary to protect consumers."

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