Challenge of FL’s Nuclear Power Tax Continues

Guest Blog | April 3, 2012 | Press Releases

Jacksonville, Fla. — The Southern Alliance for Clean Energy (SACE) filed their initial brief with the Florida Supreme Court. Their appeal, filed in December 2011, challenges the Florida Public Service Commission’s (PSC) Final Order in the 2011 Nuclear Cost Recovery docket along with the constitutionality of Florida’s early cost recovery statute, Fla. Stat. 366.93. A bipartisan group of Florida state lawmakers, including Democratic State Representatives Michelle Rehwinkel Vasilinda and Mark Pafford and Republican State Senators Mike Fasano and Charles Dean, Sr., have received approval from the Court to file a brief on the merits as amici curiae on behalf of Southern Alliance for Clean Energy. The Village of Pinecrest also intends to file a brief in support of SACE.

Issued in November of 2011, the Final Order from Docket 110009-EI approved a combined $282 million in cost recovery for Progress Energy Florida (PEF) and Florida Power & Light (FPL). Florida’s PSC has approved more than a billion dollars in advanced cost recovery over the past three years for questionable new nuclear reactors proposed by PEF and FPL, despite the fact that neither utility has demonstrated the intent to actually build the reactors. In fact, both utilities admit that no final decision to build has been made.

“It is sad that the PSC appears willing to let the power companies unfairly tax Florida families and businesses on an increasingly weak assumption they will build new nuclear reactors sometime next decade,” said Dr. Stephen A. Smith, executive director of Southern Alliance for Clean Energy. “While this is a great deal for Progress Energy and FPL’s shareholders and executives, it is horrible for Florida consumers and businesses. We believe that this law gives entirely too much discretion to the PSC, which has been arbitrarily approving everything the utilities have asked for each year. Therefore, we are asking the Florida State Supreme Court to protect consumers against this nuclear power tax scam by declaring the law unconstitutional.”

PEF has proposed two new reactors in Levy County, Florida with an estimated cost of $22.5 billion and FPL has proposed two additional reactors at their existing Turkey Point nuclear plant near Miami with an estimated cost approaching $20 billion. Both proposals are more than a decade from completion, if they are ever built, and have experienced repeated cost increases and scheduling delays. As the law was written, ratepayers would not receive a refund if either utility abandons the projects.

The Village of Pinecrest has been part of the backlash occurring against PEF and FPL regarding the nuclear pre-payment scheme. Multiple municipalities in Florida in PEF and FPL service territories, including Pinecrest, Miami-Dade League of Cities, Yankeetown and Crestview, among others, have passed resolutions opposing nuclear cost recovery.
Republican State Senator Mike Fasano opposes nuclear cost recovery, even though he voted in favor of the legislation in 2006. This year he sponsored SB 740, which would have appealed advanced cost recovery for nuclear power plants during the construction and planning phase. State Representative Michelle Rehwinkel-Vasilinda had a companion bill, HB 4031.

In terms of SACE’s legal arguments in this case, the organization argues that in order to be in compliance with § 366.93, Fla. Stat., and eligible for cost recovery, a utility, such as PEF and FPL, must demonstrate that it intends to build the nuclear power plant for which it seeks advance recovery of costs. In the 2011 Nuclear Cost Recovery docket, SACE believes that both FPL and PEF failed to demonstrate that the utilities intend to build their respective proposed new nuclear reactors, and the Commission’s finding to the contrary is arbitrary and unsupported by substantial evidence. As evidenced by both their activities and testimony, FPL and PEF have resorted to “option creation” approaches, where the only intent on the part of the utilities is to attempt to obtain the necessary licenses and approvals to operate these proposed new nuclear reactors, in order to create or preserve the option to construct if it becomes economically feasible at some point in the future.

The nuclear cost recovery statute, adopted as a last minute amendment to a comprehensive energy bill during the 2006 legislative session, violates the Florida Constitution according to SACE. The constitutional doctrine of separation of powers, codified at Art. II, § 3 of the Florida Constitution, and more specifically the nondelegation doctrine contained therein, prohibits the Florida Legislature from delegating the power to enact a law or the right to exercise unbridled discretion in applying the law to an administrative agency. The nuclear cost recovery statute violates the nondelegation doctrine, and thus the separation of powers doctrine, because the Legislature has failed to include adequate standards and guidelines in the statute to guide the Commission in its execution of the powers delegated. Due to the lack of standards in the statute, the Legislature has converted the Commission’s role from an administrative entity into a lawmaker, which has allowed the Commission to treat the nuclear cost recovery statute as a blank check for utilities claiming to be engaged in the siting, design, licensing and construction of nuclear power plants.

The briefs in support of SACE are due ten days from their brief filing date, thus on or before April 12, 2012. A reply brief from each utility, PEF and FPL, along with the PSC are due in twenty days. Both utilities have retained former Florida Supreme Court Justices. To view developments in this case, go to, click on “Docket Search” and enter the Florida Supreme Court case number “SC11-2465.” The documents listed are however, not available online. Find the full appendix filed with SACE’s brief here. # # # Southern Alliance for Clean Energy is a nonprofit organization that promotes responsible energy choices that create global warming solutions and ensure clean, safe, and healthy communities throughout the Southeast