Sun-Sentinel - 9/11/2008 12:00:00 AM
by Julie Patel
Consumer advocates are expected to clash today with Florida Power & Light over more than $200 million in nuclear project costs the company wants to pass to customers.
The Office of Public Counsel, the state's advocate for utility customers, says among other things, FPL should have used competitive bidding for more of its contracts to expand and build nuclear reactors in South Florida.
A Florida Public Service Commission hearing in Tallahassee today is one of several that are part of an annual review of costs associated with expanding nuclear plants at Turkey Point near Miami and in St. Lucie County and building two new reactors at Turkey Point. The commission will vote this fall on whether to allow FPL to pass the costs so far — $258 million — to customers starting in January. That would add more than $2.55 to an average residential customer's monthly bill, bringing it to about $119.41.
The new FPL nuclear generators are projected to cost $12 billion to $24 billion and produce 2,200 to 3,040 megawatts of electricity, enough energy to power an estimated 1 million homes beginning in 2018 and 2020. The expansions would cost about $1.5 billion and produce about 414 megawatts of nuclear generating capacity, beginning in 2011 and 2012.
The public counsel recommends the PSC prohibit FPL from earning a profit on the largest contract struck without competitive bidding. One of FPL's contractors is company affiliate, FPL Energy, the utility's unregulated arm.
"FPL failed to demonstrate that the costs of certain contracts...are reasonable," according to a public counsel report.
Without competitive bidding, "there's a feeling of unease, of not knowing for certain that you got the highest-quality product at the lowest possible cost," said Mike Twomey, a lawyer for AARP, an advocacy group for seniors and other citizens.
FPL says in many cases it simply didn't have a choice because there are so few contractors dealing with nuclear power.
With the exception of a Tennessee project in 1982, "there hasn't been a nuclear plant built in this country in over 30 years. In fact, this is one of the biggest challenges to a nuclear renaissance in this country," according to FPL spokesman Mayco Villafana. "Despite these challenges, nuclear energy continues to deliver significant savings to customers relative to gas and oil plants."
State law streamlines the process for utilities to recover costs for producing more nuclear energy. The public counsel says FPL failed to prove it didn't include in its request the cost of maintaining old units, which can't be streamlined, and that regulators should require utilities to separate maintenance costs.
FPL said it only included costs of replacing or upgrading equipment necessary to increase how much energy is produced.
Florida Industrial Power Users Group says it isn't opposed to building nuclear plants but is "perplexed" that customers would have to start paying for nuclear plants "long before the plants are built."