Lawmakers Primed to Debate Reforms on Electricity Costs
By Carl Orth | The Suncoast News
Proposed laws over electric rates could light up some debate when state lawmakers convene Tuesday for the 2009 session of the Legislature.
The escalating cost of electricity is a "real bread and butter issue," according to Greg Giordano, chief legislative assistant to state Sen. Mike Fasano, R-New Port Richey.
The recession already is hammering residents, Fasano believes. So he and state Rep. Peter Nehr, R-Tarpon Springs, have bills in the works to change the advance recovery fee the Legislature approved. The fee was intended to help finance nuclear power projects.
Progress Energy Florida was given permission last fall to raise its rates by nearly 25 percent. The rate increases, nearly half of which would fund preconstruction costs for a nuclear power plant planned for Levy County, showed up on January bills.
After the rate increase sparked protest from Progress Energy customers and public officials such as Fasano and Nehr, the utility backed off, proposing a rate reduction that would take effect by April 1.
The changes would reflect lower prices for fuel burned at power plants and a temporary reduction in the nuclear power advance fee, Progress Energy officials said.
"Progress Energy worked hard to provide immediate price relief for our customers during this unprecedented economic climate," a company spokeswoman, Suzanne Grant, wrote in a statement issued Wednesday.
"We've listened to our customers' concerns," Grant continued. "If approved by the Public Service Commission (PSC), our proposal will give customers some much needed help."
A customer using 1,000 kilowatt-hours would save more than $15 a month, or more than $135 for the remainder of the year, Grant noted.
"Progress Energy Florida has been able to lower its fuel cost estimates by $204 million for the rest of 2009, and is pleased to pass this savings on to our customers," Grant reports.
The company also is deferring about half of the nuclear financing cost recovery for the planned Levy County nuclear plant, Grant added. That saves another $198 million.
The utility wants the Legislature to keep the Renewable Technology and Energy Efficiency Act it passed in 2006 as a "landmark piece of legislation," Grant said.
It helps pay for preconstruction costs of nuclear power plants, saving some $13 billion in the long run on Project Energy's Levy project.
Otherwise, the interest compounds until the plant actually goes into service and customers could face a huge jump in rates, according to Grant.
Fasano and Nehr, however, aren't entirely convinced. Each lawmaker has proposed legislation that would permanently overhaul the advance recovery fee for nuclear power projects, instead of the temporary fix Progress Energy has proposed for this year.
The bills from Fasano and Nehr would first place a two-year moratorium on charging the advance recovery fee, Giordano explained.
If the fee is later scrapped, utilities would refund money already collected.
Fasano still wonders how the estimated cost of the Progress Energy nuclear plant in Levy County almost doubled in less than three years since lawmakers approved the advance recovery fee in 2006.
Companion bills would look at alternatives to financing nuclear power plants, Giordano said. Bond issues could be one possibility.