WUFT News

New Florida House bill could reduce utility rates, repeal cost recovery programs

By and on March 27th, 2013

The Florida House Energy and Utilities Subcommittee is proposing a bill that could reduce utility bills for many Florida residents.

The subcommittee held a hearing Wednesday with representatives from Florida Power and Light and Progress Energy to discuss cost recovery programs.

Cost recovery allows power companies to charge their customers in advance for new nuclear power plants. A problem with this plan is customers can be charged and not reimbursed even if power companies don’t end up building the plants.

Former U.S. Nuclear Regulatory Committee member Peter Bradford spoke out against cost recovery. He said the clause puts customers at risk of paying for nuclear plants that may never be developed.

Bradford also pointed out that power companies do not analyze whether some nuclear plants are in the best interests of the customers.

“They haven’t been required to conduct a rigorous, ongoing analysis using best cost estimates of alternatives, as to whether these plants remain in the best interest of the customers,” Bradford said.

Steven Scroggs, senior director of Florida Power and Light, spoke about the benefits of cost recovery for nuclear plants. He said the cost recovery clause allows power companies to increase their nuclear generation, which saves costumers money in the long run. He said cost recovery has been successful for Florida Power and Light and its customers.

“Through the nuclear cost recovery law, we were able to go forward with 500 new megawatts of base-load nuclear generation, the first nuclear generation in 30 years,” Scroggs said. “We were able to bring that on and provide our customers with savings of about 10 million dollars a month, over a 100 million dollars a year.”

Alex Glenn, Florida president of Progress Energy — which will become Duke Energy in late April — is also in favor of nuclear cost recovery. He said nuclear power is becoming a great alternative energy source as natural gas prices increase.

“We’re taking steps to maintain nuclear for the long term in the state, which we believe is the right choice,” Glenn said.

Members of the public voiced their opinions on cost recovery during the hearing. Charles Milsted, AARP Florida associate state director, said cost recovery is unfair to consumers.

“We believe with advance cost recovery that the consumer covers both the risk and the cost,” he said. “If the plant is built, the consumer will pay for it. If the plant is not built, the consumer will pay for it, and there is not likely to be a refund because many of them will not still be around.”

Currently, Progress Energy and Florida Power and Light customers may pay about two dollars per electric bill to cover nuclear plant construction. The proposed bill would repeal the cost recovery clause that allows this.


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