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Nuclear cost recovery OK’d

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Progress to charge $143M in 2013

By PAT FAHERTY

Special to the Citizen

Progress Energy Florida will be able to charge customers approximately $143 million in 2013 to cover costs associated with the Crystal River nuclear plant and the proposed plant in Levy County.

But residential customers can still expect lower electricity bills. Monday, the Florida Public Service Commission accepted its staff recommendations for the 2013 nuclear cost recovery amounts, capping a process that started in March and April when Progress Energy filed petitions seeking approval to recover estimated 2012 costs and projected 2013 costs.

The Progress Energy petitions raised about a dozen issues surrounding cost recovery for both sites, which were discussed and approved.

Under Florida statute, utilities may recover certain construction costs associated with the development and maintenance of nuclear power plants.

 

 The PSC evaluates these costs annually and approves amounts recovered through the fuel and capacity cost recovery charge on customers’ bills.

According to the staff report, if the power plant project is terminated, rather than being placed in commercial service, the utility may petition for the funds to become a regulatory asset that is amortized over a period of years.

The Crystal River nuclear plant, known as CR3, “uprate” project will get about $40 million and the proposed Levy County nuclear plant will get approximately $103 million.

Costs associated with CR3 are not connected with the plant’s repairs; instead they relate to costs incurred planning for increased capacity through major plant modifications. The PSC supported the staff position that the CR3 uprate project decisions in 2011 have been made and the 2011 costs incurred, and nothing that occurs after 2011 changes those decisions.

For the Levy project, staff believes Progress Energy’s actions since 2011 support the requirement of demonstrating its intent to build. Commissioner Eduardo E. Balbis said the company must demonstrate action moving the project forward and they are continuing on that.

Staff analysis showed the Levy project continues to be cost effective and economically feasible.

While Monday’s action means the monthly nuclear cost recovery for a 1,000 kilowatt hour customer will climb from $2.86 to $4.73 a month, they will still come out ahead in 2013. That is largely due to $129 million refund to Progress Energy customers in 2013 as part of a comprehensive rate settlement. The second half of the refund is expected to hit in 2014.

When all elements of the bill — base rates, fuel, capacity, environmental, efficiency and nuclear — are considered, the total 2013 bill is approximately $116 per 1000 kWh — down about 6 percent.

“I have long opposed the collection of any fees for advance nuclear cost recovery,” State Rep. Mike Fasano, R-New Port Richey, said in response to Monday’s action.

“From the botched repairs in Crystal River to the long-term problems associated with siting Levy County’s reactor, the customers may ultimately be paying for something that will never materialize,” said Fasano, who represents the western portion of Citrus County.

“Even if years pass and one or both of these plants ever come online, the amount invested will take decades to be recouped. I fear that few who are paying the advance nuclear cost recovery fee today will ever benefit from their forced contribution toward these projects.”

He said the PSC has deferred any consideration of 2012 rate increases until next year. Today’s action pertains only to 2011 rate increase requests.