FPL's $268 Million Early Cost Recovery A Ripoff, Pols Say UPDATED
If you have electricity in your house, you have paid FPL $268 million ostensibly to build two new reactors at Turkey Point. You'll probably pay nearly $200 million more in 2012. Problem is, those reactors may never be built. Last week we warned that the utility's Turkey Point plant could be under water in the not-too-distant future.
From Tallahassee to South Miami, politicians are pissed at FPL over something called "early cost recovery." "It's illogical and unfair," says Pinecrest councilman Jeff Cutler. "It doesn't seem right that they can ask us to pay for something that may never be built."
The idea behind Florida Statute 366.93 is simple: nuclear power plants are so expensive that companies need added incentives to build them.
Legislators left things pretty damn open ended, however. The law allows FPL and other utilities to recover "all expenses, including operation and maintenance expenses, related to or resulting from the siting, licensing, design, construction, or operation of the nuclear power plant, including new, expanded, or relocated electrical transmission lines or facilities of any size that are necessary" for new nuclear plants.
These utility companies "recover" the funds by tacking it onto customers' bills. That sounds like a blank check for giant companies written by average joes, says Cutler. Last week, he and his fellow Pinecrest council members passed a resolution urging the Public Service Commission not to allow FPL any more ECR funds. They also called on state legislators to repeal the ECR statute entirely, blaming it for higher utility rates.
FPL could not be reached for comment by press time.
Pinecrest isn't alone. South Miami Mayor Philip Stoddard recently accused FPL of using a plan for new reactors as an excuse to inject ECR funds into completely unrelated projects.
"This is the hunting license that allows FPL to charge us through Early Cost Recovery for the high cost of beefing up their transmission system with a series of new high voltage transmission lines through the Everglades and heavily populated areas of Miami-Dade County," he wrote in an op-ed. "FPL wants those lines to support fossil fuel powered plants, but rate payers can only be gouged up front for them if FPL gets approval for a license to build new nukes."
Some state legislators, at least, are paying attention. Rep. Michelle Rehwinkel Vasilinda (D-Tallahassee) reintroduced a bill to rescind Statute 366.93 yesterday.
FPL has already "recovered" $268 million from its customers, supposedly to invest in two new nuclear reactors at Turkey Point. But Cutler points out that the Nuclear Regulatory Commission has yet to even license the reactors: they could easily never be built, but FPL customers would still have to pay.
"I'm not against nuclear power," Cutler says. "But the game is loaded in favor of the utilities. They are private company with a guaranteed rate of return - if they fall short, they just raise rates... Any other business would be asked to put themselves on the line and take a loan. So why can't they?"
UPDATE: Since this blog was first posted, FPL sent a response:
New Times readers should know that FPL's new nuclear projects are already underway and, more importantly, these projects are saving customers money today. Since May of this year, we have been generating roughly 29 additional new megawatts resulting from upgrades at our existing St. Lucie nuclear plant. This translates into about $3 million in fossil fuel savings in just the first 100 days of operation. That's approximately $30,000 a day less in fossil fuel costs that would otherwise appear on customers' bills. When the upgrades at St. Lucie and Turkey Point are completed in 2013, our customers will save $106 million in the first year of operation and $4.6 billion over the project's lifetime.
It is well documented that over the life of a nuclear power plant, customers save billions of dollars in fuel costs and avoided emission compliance costs over and above the cost of these projects, and enjoy the benefits of greater diversity of fuel sources. Our investment in nuclear power plants ensures that our customers are experiencing real benefits today while developing the option for greater benefits in the future.
Florida Power & Light