Orlando Sentinal: Nukes Gouge Customers

November 23, 2008

orlandosentinel.com/news/opinion/orl-ed23108nov23,0,4335624.story
EDITORIAL
We think: Nuclear power's a worthy goal, but customers are getting hammered
The problem isn't that power companies in Florida can now build nuclear plants faster and easier.

The problem is the price of this newfound efficiency, which is weighing far too heavily on customers already facing hard financial times.

Hundreds of thousands of power customers in Central Florida will start feeling the pain in January when Progress Energy increases its rates by 25 percent. Part of that increase is to pay for fuel costs, but a healthy portion is to generate money for two nuclear plants that Progress wants to build near Florida's Gulf Coast. Florida Power & Light also is getting a rate increase, though a smaller one, so it can upgrade existing nuclear plants in South Florida.

The rate increase just for Progress Energy's nuclear program is expected to generate more than $418 million in 2009 alone. Customers will wind up paying somewhere near $4 billion for the plants before either of them produces the first kilowatt of power around 2016.

We support generating more power through nuclear plants. It reduces carbon emissions and, just as important, our nation's dependence on fossil fuels like crude oil, coal and natural gas. We also believe that ending our nation's addict ion to fossil fuels won't come without some financial sacrifice.

But the burdensome increase shines a hot light on a flaw in Florida's 2006 energy bill, which on the whole was a welcome effort by the Legislature to encourage alternative energy sources. Tucked deep into the bill were utility-friendly provisions that let power companies seek "cost recovery" increases for nuclear-plant construction. Even if the project fails, the law also allows utilities to recover their investment through power bills.

Power companies rightly argue that it's all but impossible to borrow the kind of money it takes to build a nuke. The Levy County projects are expected to cost $17 billion, far more than the cost of a building a plant that burns fossil fuels. Just try borrowing that much in today's locked-down credit market. Power companies simply wouldn't build nuclear plants.

But that doesn't mean so much of the burden should fall so suddenly on customers, many of whom are struggling because of the same sour economy that creates a difficult business climate for companies like Progress Energy.

One PSC member argued that the law gave her and her fellow commissioners no choice but to approve the utility companies' rate-increase requests. Commissioner Nancy Argenziano got so worked up she fired off an angry letter to a couple of state legislators who voted for the 2006 energy bill.

Ms. Argenziano must have forgotten that she, too, voted for the bill back in 2006 when she was in the Senate, along=2 0with every other state senator.

That unanimity suggests the energy bill had a lot going for it, but that senators like Ms. Argenziano didn't fully grasp the consequences for ratepayers until now.

The consequence for Progress Energy customers is this: The average household will have to come up with another $164 next year to pay for nuclear-plant construction, and another $300 for increased fuel prices.