Fla. Mayors Oppose Nuclear “Cost Recovery” Bailout

Guest Blog | October 20, 2011 | Press Releases

Miami, Fla. (October 20, 2011) — The mayors of South Miami and Pinecrest are leading the Florida consumer opposition against the most recent cost recovery request for new nuclear power, which would allow state utilities Florida Power & Light (FPL) and Progress Energy Florida (PEF) to collect more than a third of a billion dollars from Florida families and businesses, including senior citizens, in 2012 for developing new nuclear reactors and expansion of existing nuclear plants.

The latest Florida bailout by ratepayers of the nuclear industry will be voted on at a Florida Public Service Commission (PSC) meeting being held on October 24, 2011.

The mayors are also encouraging Floridians who oppose paying up front for uncertain nuclear projects to speak out to the PSC by sending a letter through an online campaign at http://org2.democracyinaction.org/o/5502/p/dia/action/public/?action_KEY=8362. The cities of South Miami, Pinecrest, and Biscayne Park – along with the Miami-Dade League of Cities – have all passed resolutions opposing the nuclear cost recovery law. Other state lawmakers have also worked to repeal legislation already approved, including Sen. Mike Fasano (District 11-R), who originally voted for cost recovery but changed his mind after seeing the negative impacts to customers, and Rep. Michelle Rehwinkel Vasilinda (District 9-D), who twice introduced repeal legislation, most recently the current Florida HB 4031.

South Miami Mayor Dr. Philip Stoddard stated: “We’re being charged up front for unproven nuclear reactor designs that we don’t want near our homes, that will double the price of electricity, and that take the money from renewable power we do want. But Florida ratepayers are still required to pay in advance for costs associated with these nuclear reactors. And if the reactors aren’t built, we don’t get our money back. This cancer cannot go unchecked.” Pinecrest Mayor Cindy Lerner said: “Pinecrest residents – along with many other Florida ratepayers – have already been bilked out of millions of dollars to date in increased rates approved by the PSC for nuclear reactors that may never pump out a single electron of power. It is not fair to the city of Pinecrest or to any Florida residents to have them pay for an energy source from which they may never benefit. There are lower-risk and less expensive alternatives available, such as energy efficiency, and we need to focus on those approaches as we look to the future.” Since 2009, the Florida PSC has approved over $700 million for FPL and PEF’s proposed nuclear projects, including uprate projects at several existing nuclear reactors, including Progress’ troubled Crystal River uprate, and two proposed new reactors each at Turkey Point near Miami and in Levy County. The current proposal to be voted on by the PSC on October 24 includes $196 million for FPL and $141 million for PEF, a total of $337 million.

If they gain PSC approval again this year, the two utilities will have been granted access to over one billion dollars from Florida’s families and businesses. This year’s requests amount to an increase of about $5 per month per 1,000 kilowatt hours (kWh) for PEF customers and $2.10 for FPL customers. Similar anti-consumer proposals have been rejected in other states, including North Carolina and Iowa. An October 6, 2011 report by Synapse Energy Economics estimates that by 2021, the Levy project alone will add at least $718 per year to the bill of a typical Progress Energy residential customer using 1100 kWh per month.

Jamie Whitlock, attorney with Gary Davis & Associates and legal counsel for Southern Alliance for Clean Energy said: “It is simply unfair, unjust, and unreasonable for the Florida Public Service Commission to continue to require PEF and FPL ratepayers to pay hundreds of millions of dollars just so the utilities can ‘create an option’ to construct proposed new nuclear reactors. In order to be eligible for advance cost recovery under the Florida statute, utilities have to demonstrate the intent to actually construct the proposed new reactors. However, neither utility has demonstrated this intent. The only intent shown is to try and obtain federal licensing approval from the Nuclear Regulatory Commission. Ultimately, neither utility has made a final decision to actually construct these proposed new reactors, and as a result PEF and FPL ratepayers should not be forced to bear the burden of paying for proposed new reactors that are unlikely to ever be constructed.” Mark Cooper testified at PSC hearings in 2009 and 2010 for the Southern Alliance for Clean Energy, noting that several key variables rendered new nuclear reactors uneconomic and unnecessary. They include: declining natural gas costs; declining estimates of carbon prices; declining demand due to the economic slowdown; reduced need for nonrenewable generation due to increased energy efficiency; fast-rising projections of nuclear construction costs; and the high degree of uncertainty in the economic environment that new reactors face, particularly post-Fukushima and East coast earthquake.

Cooper stated: “In 2009 and 2010, we told the Florida PSC that it should deny the FPL and Progress requests for recovery of hundreds of millions of dollars of costs for the proposed nuclear reactors at Turkey Point and in Levy County because they were no longer necessary and would result in billions of dollars of excess costs being needlessly imposed on consumers. Nonetheless, the PSC approved the increased rates so Florida consumers are now paying $700 million up-front for new nuclear reactors that may never see the light of day. In addition, there is no requirement that they be paid back if the reactors are not built.” Cooper added: “The proposed Florida reactor delivery dates have already been pushed back by half a decade and FPL still has not yet decided whether to actually build the reactors. In addition, all of the factors that looked bad for more nuclear in Florida in 2009 and 2010 continue to be true. Many have continued to develop in a manner that further undermines the long-term feasibility of ever completing these proposed nuclear reactors in Florida. As a result, it is neither reasonable nor prudent to incur additional costs for these proposed reactors.” More information about the history of nuclear cost recovery to date in Florida can be found at https://cleanenergy.org/2011/09/22/florida-nuclear-costs/.

For Dr. Mark Cooper’s opening press statement, see http://www.cleanenergy.org/wp-content/uploads/Cooper_FLcostrecoveryStatement102011.pdf.

EDITOR’S NOTE: A streaming audio replay of the Florida news event will be available on the Web at http://www.hastingsgroupmedia.com/102011FLnuclearcostrecoveryopposition.mp3 as of 5 p.m. EDT on October 20, 2011. # # # 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.www.cleanenergy.org