Florida Senate Committee Passes Bill Overhauling Nuclear Power Construction Fees
Yesterday, the Florida Senate Communications, Energy and Public Utilities Committee unanimously passed legislation that would greatly change a 2006 measure designed to allow utilities to charge upfront costs for nuclear power projects before they go into service.
SB 1472, which was introduced by Senator John Legg, would significantly overhaul an incentive measure created nearly seven years ago - known as the Nuclear Cost Recovery Clause - to encourage utilities to reduce the sizable capital costs associated with constructing new nuclear power plants by allowing them to seek rate recovery at the Public Service Commission (PSC) before plants come online. According to supporters and major investor-owned utilities in Florida like Progress Energy and FPL, the Nuclear Cost Recovery Clause was included in the the Florida Renewable Technology and Energy Efficiency Act of 2006 as a way to minimize the preconstruction and licensing costs that can make nuclear projects financial cost-prohibitive and as a way to reduce the state's dependency on natural gas for its baseload power generation.
Among the many changes made to the 2006 law, SB 1472 would limit a utility's ability to seek rate recovery at the PSC for only costs associated with obtaining a construction license. Additional benchmarks were also included that added new timelines and limits on a utility's ability to charge rates for failing projects or cost-overruns. Further, the legislation included a "prudency review" that would force Progress Energy to gain approval from the PSC to continue moving forward on a reactor project north of the Tampa Bay area in Levy County which has garnered controversy after the project costs have increased significantly from $5 billion to $24 billion.
The bill appears to be moving swiftly through the Senate and it now heads to the Community Affairs Committee for a hearing and then floor consideration. A similar measure has also been introduced in the House and is scheduled for a hearing before the House Energy and Utility Committee this week.