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PSC moves forward with nuclear hearing following Levy County project's cancellation

PSC members Lisa Edgar, Ronald A. Brise and Art Graham listen to a Florida Power & Light Co. official during a hearing Monday on nuclear cost recovery. Photo by Bruce Ritchie.

The Public Service Commission on Monday deferred action on Duke Energy Florida after the company filed an agreement that calls for cancelling its proposed nuclear plant in Levy County.

The PSC began a scheduled weeklong hearing for Florida Power & Light Co.'s request for nuclear cost recovery. Florida law since 2006 has allowed utilities to charge customers for nuclear power plants that may never be built. The Legislature in May passed SB 1472, which places some restrictions on costs that can be recovered and lowers the rate of return for utilities.

Duke Energy Florida announced Aug. 1 that it had reached a settlement agreement with the Office of Public Counsel and other challengers. The agreement included canceling the project although it plans to continue seeking a federal license for the plant.

The company said federal licensing delays and SB 1472 contributed to the decision to cancel the project.

SB 1472, signed by Gov. Rick Scott on June 14, limits nuclear cost recovery to those costs related to applying for a federal license. The bill also requires PSC approval to begin pre-construction and construction phases, according to a PSC analysis.

Duke Energy Florida is seeking $174.6 million for the proposed new nuclear plant in Levy County and for work on the botched upgrade of its Crystal River plant. The Public Service Commission will reschedule a hearing on the request.

Last week, Sen. John Legg, R-Lutz and sponsor of SB 1472, disputed Duke's claim that the legislation was a factor in the decision to cancel the plant.

Sterling Ivey, company spokesman, said Monday the increased reviews by the PSC were a concern.

"As you know we didn't support any changes to the legislation," Ivey said. "But the increased prudence reviews before the Public Service Commission creates some uncertainty for our company in investing in that site."

Susan Glickman, representing the Southern Alliance for Clean Energy, said Monday that she thinks the legislation would have led to a more rigorous review of the company's request by the Public Service Commission.

"They could have stopped the plants a long time ago but they didn't," Glickman said. "But the attention paid to the issue in the Legislature sent a message to the Public Service Commission that they need to be more concerned about these costs."

Her group challenged the 2006 law before the Florida Supreme Court. In May, the court dismissed the group's claim that the law was vague and unconstitutional.

FPL is requesting $28.2 million in costs associated with proposed new nuclear units at its Turkey Point power plant in Dade County along with upgrades of plants there and in St. Lucie County.

During the hearing on Monday, Southern Alliance for Clean Energy attorney George Cavros pressed FPL's Steven R. Sim, senior manager of integrated resource planning, to explain how FPL's analysis leads it to believe that a new nuclear plant in Dade County remains feasible when Duke decided the Levy County plant is not.

"What's true for one utility system is not necessarily the same for another utility system," Sim said.

A decision on whether the law changes dealing with rate of return on capital investments applies to the utilities was put off by the Duke settlement agreement and another with FPL in which the utility agreed to reduce its request by $1.6 million to match a reduced rate of return on the projects allowed by SB 1472.

"They are giving up on the money," Public Counsel J. R. Kelly said. "They agreed to our position without agreeing that the law applies."

Related Research:
* Aug. 1, 2013 Duke Energy Florida motion to defer
* Aug. 2, 2013 Florida Public Service Commission announcement for Monday's Nuclear Cost Recovery Hearing
* Aug. 2, 2013 Statement from Rep. Michelle Rehwinkel Vasilinda
* Aug. 1, 2013 Duke Energy Florida settlement agreement PSC filing
* Aug. 1, 2013 Press release, "Duke Energy reaches revised multi-year settlement with Florida consumer advocates"
* Aug. 1, 2013 Southern Alliance for Clean Energy statement on Duke Energy settlement
* Aug. 1, 2013 Statement from Rep. Dwight Dudley

Reporter Bruce Ritchie can be reached at [email protected].

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