SACE nuclear suit faces skeptical crowd at Florida high court

Lawyers from the Florida Public Service Commission (PSC) and the state’s two nuclear utilities argued Oct. 4 that the Southern Alliance for Clean Energy (SACE) was making a political argument, rather than a legal one, in its suit against advanced rate recovery for nuclear facilities that have yet to generate electricity.

Unfortunately for SACE, this argument seemed to resonate with at least some of the Florida Supreme Court justices hearing the case, which is SACE versus Art Graham (SC11-2465). The Graham named in the suit has served as PSC chairman and is still a commissioner.

SACE was before the Florida high court to challenge PSC approval of early rate recovery for nuclear units that could be developed in the future by subsidiaries of NextEra Energy (NYSE: NEE) and Duke Energy (NYSE: DUK).

The PSC had granted the petitions of Florida Power and Light (FPL) and Progress Energy Florida (PEF) for determination of need for their proposed nuclear power plants. The PSC later issued an order granting their related petitions filed under a law that allows recovery in rates of certain costs incurred prior to commercial operation of the plants.

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

SACE has challenged that order, arguing that the costs at issue do not qualify for recovery under the law and that the law is unconstitutional.

Environmental lawyer Gary Davis, who represented SACE, said the relaxed nuclear rate recovery standard now in place represents “a radical departure” from the long-standing framework for utilities.

But everyone knows that already, replied Justice Barbara Pariente. She countered that this was a policy decision made by the Florida Legislature and the court’s scope of review is narrow.

Similar comments were voiced by Justice Fred Lewis. Lewis said SACE appeared to be questioning the wisdom of the law, and that’s a “political” issue and not a legal one. “We may agree with you,” but there appears to be little legal remedy, Lewis suggested.

Progress Energy Florida attorney Stephen Grimes also said that SACE was basically second-guessing Florida lawmakers. The petitioners seem to “make it a referendum on whether it’s a good idea or not. That’s not before this court,” Grimes said.

Davis, the attorney for SACE, also argued that the power companies were passing costs onto ratepayers already for nuclear plants they might not ever build. With each new projection from the company, the estimated operation date for the new nuclear units keep getting pushed out further into the future – and at an increasingly high cost for customers, Davis said.

Company lawyers, however, said the record shows that the utilities are indeed devoting manpower and resources to seeking NRC licenses, although the dates are uncertain.

An attorney for the Florida PSC also argued there are some customer protections built into the law.

A source connected with the case hopes the court can issue a decision this year but stressed there is no set timetable.

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.