Should Progress Energy customers pay for new nuclear plants? A crowd in Pinellas says no

01/12/12 Janelle Irwin
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Progress Energy customers might see even more of an increase on their electric bills by the year 2020. The rate hike funds construction of a new power plant in Levy County. About 150 concerned ratepayers packed an auditorium at St. Pete College’s Seminole campus last night for a panel discussion to find out why they have to pay for it.

“They allow the utility to collect or recover their cost before as they incur them, before the plant starts generating electricity on behalf of you, the consumer.”

That was J.R. Kelly, one of the four panelists. He’s public counsel for the state’s Legislative Committee on Public Service Commission Oversight. Kelly said it used to be that energy companies weren’t allowed to pass costs on to customers until a job was approved and completed. Another panelist, nuclear engineer Jerry Paul, said the new rules will actually save ratepayers money. He compared it to paying a credit card as charges are made to save on finance charges.

“When we build an aircraft carrier, when we build a school, we don’t wait until the device is actually deployed, launched into the ocean or students at a desk before any of the costs are recovered. The costs are recovered as they’re incurred.”

But the audience was full of skeptics. The average Progress Energy customer stands to owe an extra 50 dollars per month. People with larger homes and businesses would suffer an even larger blow. The biggest part of the rate increase is to pay for two proposed reactors in Levy County. Paul said nuclear energy is cheaper than any other source, so eventually rate payers would actually save money.

“Florida has, among the Southeastern states, the highest electricity rates. Not by a whole lot, but they are the highest rates. South Carolina has the lowest. Interestingly you’ll find that Florida has the lowest percentage of nuclear. South Carolina has the highest.”

One of the problems with the collect first, build later mentality is that Progress Energy is under no obligation to actually build the new plant. They’re also not required to pay customers back the money they collected if they change their plans. Ellen Vancko, project manager for the Union of Concerned Scientists said the process is asking too much of its customers.

“I can buy any one of the mansions I passed while driving down to this university if I only had to pay the electric bill. But, unfortunately you have to actually pay for the mansion before you can go live in it. You have to buy the drapes, the furniture, you have to get a butler. I mean, it’s not cheap.”

Tampa Bay Times staff writer Ivan Penn has extensively reported on the cost recovery debate. He said another problem with charging customers for future projects is that some customers might not ever reap the benefits.

“If Levy is set to come on in 2021 and I’m 91, I’m likely to be dead by then. So, paying in advance, whether that’s good financing, a good way to pay, that really doesn’t do me a whole lot of good.”

Progress Energy customers are already paying an average of $3 per month in part for repairs to an existing nuclear plant in Crystal River. Because it’s now offline due to gaps in a cement containment building, part of the extra customer cost is for Progress to purchase replacement energy. The repair bill keeps getting bigger and bigger and now, the insurance company for the energy giant might not pay for the damages either. Penn said there’s just too much uncertainty surrounding just what ratepayers will have to shell out on their bills.

“Three dollars doesn’t sound like a whole lot of money, but add $3 to $49 to whatever the insurance company decides that it will pay or not pay. If the plant does get decommissioned, there is a decommissioning fund that has a little over $500 million – is that enough to cover shutting the plant down? If they do take Crystal River offline they’ve said, ‘well, we need another power source, another base source, like natural gas’. Well, now we’re talking about having to come up with the money for a natural gas plant.”

All four panelists agreed that nuclear energy has among the lowest kilowatt hour cost. It’s getting started that breaks the bank. Ellen Vancko of the Union of Concerned Scientists said 29 states and Washington D.C. have either passed or implemented policies to require utilities to tap into renewable energy sources. Florida is not one of them.

“The state has the potential to develop more than 136,000 Megawatts of renewable electricity capacity by 2020. Now, all of that capacity potential may not be feasible, but even if you took a fraction of the 136,000 Megawatts of electricity that would be multiples more than the 2200 Megawatt Levy reactors would produce.”

Mary Wilkerson was one of the many audience members who nodded when a panelist criticized nuclear energy and chuckled when one defended it.

“I absolutely think we have to get the low hanging fruit first. We have to look at efficiencies. That’s the most economical thing that we can do. And then from there, if we can get some more enlightened representation in Tallahassee, I would like to see us go in that direction of sustainability and renewables.”

There was at least one supporter of nuclear energy in the audience. He’s an environmental engineer looking for work, so he didn’t want to give his name. But he said being an environmental engineer doesn’t make him an environmentalist. If people want to save money on electricity they should turn off a few lights. He added renewables aren’t enough for a high energy demand population.

“They’re really trying to meet the needs of the customers. Now granted, can you put money into solar, can you put money into bio-gas, can you put money into all these other renewable agents? Well, sure, but long-term bulk yield or base load yields have to be met and they’re looking at that point. They’re saying, ‘well, we have to look at these things’.”

The question of nuclear energy’s impact on the environment was also discussed. And nuclear engineer Jerry Paul said there’s no emissions associated with nuclear like other energy sources. But a public hearing tonight in Crystal River will address potential groundwater contamination from nuclear power plants. It’s at the Plantation Inn at 9301 West Fort Island Trail from 7 until 10 o’clock. There was another hearing earlier this afternoon.

Organizers say Progress Energy representatives were invited to participate in the forum but they weren't able to attend.

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