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- 2012 - October - 4th -

Hot nuclear debate headed to high court

by Jim Saunders, The News Service of Florida

With the state Supreme Court ready to hear arguments about a controversial law that has led to consumers paying for potential nuclear-power projects, opponents Wednesday reiterated criticism that the law is a “hidden tax” on Floridians.

But justices today likely will focus on more-esoteric legal issues, including whether the law is unconstitutional because it gives too much decision-making authority to the Florida Public Service Commission.

The Southern Alliance for Clean Energy filed the legal challenge after the Public Service Commission late last year approved allowing Florida Power & Light and Progress Energy Florida to pass along about $282 million in nuclear-project costs to customers in 2012.

The controversy focuses on the utilities being able to use part of that money to defray upfront costs of potential nuclear plants in Miami-Dade and Levy counties that would not start generating electricity for another decade -— if ever. The Legislature approved the law in 2006 as a way to encourage development of nuclear power and requires the utilities to go before the PSC each year to determine how much money they can pass along to consumers.

The Southern Alliance for Clean Energy, which opposes the potential plants, took issue with the PSC’s decisions last year but also raised broader constitutional issues about the 2006 law. It argues that the law did not give adequate standards for the PSC to make decisions, resulting in “unbridled discretion” for the agency that violates the state constitution.

“Because it is devoid of standards, (the law) has had the dramatic effect of transferring all risk for proposed nuclear projects of Florida utilities away from utility shareholders and onto the utility’s ratepayers, giving the utilities a blank check to risk billions of dollars of the ratepayers’ money on speculative projects that would not be financed by the private sector,’’ attorneys for the alliance wrote in an April brief.

But attorneys for the PSC and utilities reject those arguments, saying the 2006 law makes clear that utilities are eligible to pass along the nuclear-project costs and also provides adequate standards for regulators. The PSC contended in a brief that the “factual determination of whether a cost is prudent and, thus, should be included in rates is within the commission’s ratemaking expertise” and is the type of role properly given to regulators.

“(The Southern Alliance’s) hollow arguments are a thinly veiled attempt to make this case a referendum on the wisdom of nuclear power,’’ Progress said in a May brief. “The Legislature has already made that choice. The PSC has carefully followed the Legislature’s directions on how to implement the statutes.”

The nuclear costs have become a controversial political issue, though lawmakers have rejected proposals to repeal or make significant changes to the 2006 law. Opponents, including the senior-advocacy group AARP, Sen. Mike Fasano (R-New Port Richey) and Rep. Michelle Rehwinkel-Vasilinda (D-Tallahassee) held a conference call Wednesday with reporters to criticize the costs.

“What’s very disturbing to me, it is a tax," Fasano said.

Charles Milsted, associate state director of AARP Florida, said utility costs particularly hit low-income and older residents. Also, many current ratepayers might not ever get electricity from new nuclear plants, as Progress, for example, has said it would not go online in Levy County until 2024.

But nuclear-power supporters say, in part, such projects would hold down long-term costs because utilities would not have to rely so heavily on other fuels, such as natural gas, to produce electricity. 

Also, they say the 2006 law allows utilities to collect money that helps finance projects to expand the capacities of already-existing nuclear plants. They say such projects ultimately can help save billions of dollars that would have otherwise gone to pay for natural gas or another type of power-plant fuel.

“This fuel-cost savings is more than the cost of the expansions themselves,’’ said former state Rep. Jerry Paul, a nuclear engineer and attorney who works with a group called the Energy Information Center. “That’s smart economics, and it’s worth the investment for cleaner air from nuclear plants which emit no greenhouse gases.”

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