Florida high court considers nuclear rate recovery

On Oct. 4 the Florida Supreme Court will hear oral arguments in a citizen group’s legal challenge to the amended rate recovery rules that have the effect of making it easier for utilities to recoup the costs of big-ticket items like nuclear power plants.

The suit brought by the Southern Alliance for Clean Energy (Case SC11-2465) was sparked by a Florida Public Service Commission decision in November 2011 that approved cost recovery for certain nuclear projects on behalf of Florida Power and Light (FPL) and Progress Energy Florida (PEF).

FPL is part of NextEra Energy (NYSE: NEE). Following a merger earlier this year, PEF is now part of Duke Energy (NYSE: DUK).

Each side in the case, Southern Alliance vs. Art Graham, will get a maximum of 30 minutes for oral argument.

SACE has been a vocal opponent of provisions that allow electric utilities to start charging customers for certain infrastructure before such projects are actually placed into service.

SACE argues that PSC precedent explicitly requires the utilities to demonstrate their intent to actually build proposed new nuclear reactors in order to be eligible for cost recovery.

The mere intent to obtain a combined construction and operating license (COL) from the Nuclear Regulatory Commission (NRC) “does not equate to the intent to build,” SACE argues.

The Florida PSC argues that cost recovery is appropriate and that FPL has demonstrated that it intends to build Turkey Point Units 6 and 7. Likewise, the PSC argues that PEF has qualified to recover costs related to the siting, design and licensing necessary for the proposed Levy County Units 1 and 2.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.