Florida PSC approves more than $290m of nuclear cost recovery

The Florida Public Service Commission on Nov. 26 approved certain cost recovery requests pertaining to nuclear power projects controlled by Duke Energy (NYSE: DUK) and NextEra Energy (NYSE: NEE) subsidiaries in the state.

At issue were certain costs submitted by Duke’s Progress Energy Florida (PEF) subsidiary for development of the planned Levy County nuclear plant as well as costs associated with the 860-MW Crystal River 3 nuclear unit.

PEF’s approved recovery of approximately $143m includes costs associated with construction of its proposed nuclear power plant, Levy Units 1 and 2, and adding capacity to its existing Crystal River 3 (CR3) nuclear generating plant. CR3 recovery includes only prudent 2011 uprate costs, since the PSC approved PEF’s motion to defer 2012-13 CR3 project cost recovery to next year.

The Duke subsidiary wants to add about 2,380 MW of new nuclear generation in Florida, the PSC said in a news release.

NextEra’s Florida Power & Light (FPL) got the approved recovery of approximately $151m, including costs associated with construction of its planned Turkey Point Units 6 and 7 and adding capacity to existing Turkey Point Units 3 and 4 and St. Lucie Units 1 and 2. When completed, these projects are projected to add approximately 2,722 MW of new nuclear baseload generation to FPL’s system, enough energy to power 1.4 million homes.

The Southern Alliance for Clean Energy had opposed cost recovery for the various nuclear projects.

Crystal River 3 has been out of service since the fall of 2009 when cracks were discovered in the building during replacement of steam generators. Duke Energy has been considering whether to repair the unit or replace it with other electric generation.

Estimated 2013 residential nuclear cost recovery, based on current sales forecast, is about $4.79 per month for the first 1,000 kilowatt hours (kWh) for PEF customers and about $1.69 per month for the first 1,000 kWh for FPL customers. Approved amounts for both PEF and FPL customer bills will be recovered through the fuel and capacity cost recovery charge on customer bills beginning in January.

To encourage the development of nuclear power, the Florida Legislature enacted a law in 2006 to permit utilities to recover some nuclear plant project costs during the construction process. The PSC then adopted a rule on how to evaluate those costs annually.    

During the meeting, which was webcast, Commissioner Julie Imanuel Brown said she was sympathetic to the argument raised by some ratepayers that they are going to be forced to pay increased bills for new nuclear plants although they might not still be around once these new reactors start operating.

Commissioner Eduardo Balbis noted that by the spring of 2013, the state will have access to 500 MW of new generation thanks to power uprate projects that are currently being concluded.

The case number is 120009-EI.

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.