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After years of no action, House committee moves bill to modify nuclear fee law

A Florida House committee signaled its willingness Thursday to make official what has already happened in practice and passed a bill that will end the future development of nuclear power plants in Florida.

The House Energy and Utility Committee approved PCB 13-01 to prevent utility companies from charging customers for the development of nuclear plants before they obtain a license and precludes any new power plants from being eligible to collect the nuclear fees.

“This is only a start but, it should not go unnoticed this is a big start,’’ said Rep. Jose Felix Diaz, R-Miami, chairman of the committee.

Since the nuclear cost recovery statute was passed in 2006, Progress Energy has charged customers more than $1 billion to expand the now shutdown Crystal River nuclear power plant and to start developing a new nuclear power plant in Levy County. The company terminated the Crystal River project, does not have a permit for the Levy County project, but has kept $150 million of the money in profits.

Florida Power & Light collected $511 million and used the money to finance expansions to its existing power plants at Turkey Point and in St. Lucie County. It has also proposed building two new reactors at Turkey Point but has not yet obtained a permit from the federal government to do it.

Now that FPL’s last expansion project is about to go online, the company is publicly objecting to the bill but not engaging its lobbyist might to kill it. The bill does not repeal the law until 2025, but limits utilities from collecting the money.

The bill is similar to a measure that passed a Senate committee early this week and is the first time in eight years that lawmakers have stood up to pressure from the powerful utility industry which has resisted any change to the 2006 law.

The House bill, however, is not only disliked by the utility industry, it also received a lukewarm reaction from consumer advocates who say it doesn't go far enough to cap the costs of speculative nuclear development and fails to encourage cost-efficient options to expensive power plant construction. 

"Unfortunately, what is being proposed doesn’t fix the problem,'' said Susan Glickman of the Southern Alliance for Clean Energy. Florida's utility regulation "rewards capital expenditure. Not only do we need to fix past mistakes, we need to avoid future ones." 

Consumers groups for years have complained that the ability of Progress Energy and Florida Power & Light to charge customers for nuclear plants that never may be developed was corporate welfare. The utility companies have said that customers will save money in the long run if they are charged for the development of the expensive nuclear plants before the projects are constructed.

The House bill imposes new restrictions that utility companies say will remove all incentives for them to develop nuclear options.

“This bill puts an end to nuclear power plants,’’ said Jerry Paul, a former nuclear reactor engineer with the Energy Information Center. Since nuclear power provides 73 percent of the nation’s no-emissions energy, he believes “a vote for this bill is a vote against cleaner air.”

But for Mary and Lee Wilkerson, small business owners who operate an upscale resort in Indian Rocks Beach near Clearwater, the legislature’s support for expensive nuclear power is out of step with the public.

“At Gulfside resorts, we spent roughly $40,000 with the power company annually,’’ Mary Wilkerson told the House committee. “We want reliable, cost effective and clean power, but we do not support buying the most expensive power. We can’t afford it. And we do not support paying for the plants that we do not believe will be built.”

She said she has no idea how much of her bill goes into paying the nuclear fee. She urged legislators to change the incentives that now encourage utility companies to build expensive power plants to they can earn a guaranteed profit and get all their costs recovered.

“We desperately need you, our representatives, to keep the plans fair and balanced and in the interest of the consumers,” she said.

Lee Wilkerson said after the meeting that he and his wife took three days off of work to come to Tallahassee to encourage legislators to shift the debate. He said he believes companies like his should have the option of using the nuclear fee to invest in roof-top solar production rather than give the money to the utility giants.

“We aren’t having that conversation because decentralized power production sounds the death knell or the big power producers,’’ he said. “The power producers are not inclined to want to produce any less energy and legislators listen to them because of where their money comes to get them elected.”

For years, legislative leaders have refused to schedule any hearings on bills to repeal or modify the nuclear fee when they were filed by Rep. Michelle Rehwinkel-Vasilina, D-Tallahassee, and Sen. Mike Fasano, R-New Port Richey. 

The House hearing Thursday, and the fact that a similar bill is moving in the Senate, signals a change of face for the legislature. Lawmakers from both parties have accepted millions in campaign contributions from the giant utilities companies as they have rejected calls from consumers and alternative energy groups to modify the nuclear fee.

Despite the effort, utility companies don’t like either the House or Senate bills but have not aggressively fought them either.

Susan Clark, a former utility regulator who now represents the state’s four largest electric companies, told the committee that the law allowing utilities to collect the nuclear costs ahead of construction was to encourage energy diversity and save customers money.

“Without the legislation, nuclear power would not be an option for any utility,’’ she said.