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FPL Chief Defends Nuclear Cost Law

January 31, 2013 - 6:00pm

The president of Florida Power & Light made clear Thursday that his company will fight legislative attempts to repeal a controversial law that has allowed utilities to collect hundreds of millions of dollars from customers for nuclear-power projects.

Eric Silagy said in an interview that the 2006 law has allowed FPL to upgrade already-existing nuclear plants in Miami-Dade and St. Lucie counties, along with taking steps toward possibly building two new reactors. He said the upgrades, for example, already are saving millions of dollars a month that otherwise would need to go toward buying fuel for generating electricity at other power plants.

Silagy said he thinks the law "should be celebrated, not repealed, because it's worked."

Two outspoken critics of the law, Reps. Michelle Rehwinkel Vasilinda, D-Tallahassee, and Mike Fasano, R-New Port Richey, have filed a bill to try to repeal it during the legislative session that starts in March. Such attempts have failed in the past, but The Miami Herald reported Wednesday that House Speaker Will Weatherford, R-Wesley Chapel, indicated he is open to possible revisions.

FPL and Progress Energy Florida have used the law in recent years to get approval from the state Public Service Commission to pass along nuclear-project costs to customers. While the amounts vary each year, FPL is expected to collect about $151 million this year from customers, while Progress will collect about $143 million.

Ordinarily, utility project costs are built into customer bills after the projects are completed. But the 2006 law, which was aimed at encouraging more nuclear power, allows the utilities to recoup costs as the projects go along.

The controversy primarily centers on money that the utilities are collecting for proposed nuclear plants that would not start generating electricity for another decade, if ever. The Florida Supreme Court heard arguments last year in a constitutional challenge to the law. That challenge, filed by the Southern Alliance for Clean Energy, remains pending.

Most of the money collected this year by FPL will go for the upgrades at the already-existing plants, with the final part of the upgrades expected to be finished this spring. FPL also is spending money to seek license approval from the Nuclear Regulatory Commission for the possible new nuclear reactors at the Turkey Point complex in Miami-Dade County.

Silagy said the law only gives permission to utilities to recover expenses for the projects and that regulators must determine that those expenses are "prudent." He also said the law reduces the amount of financing costs that otherwise would be passed on later to customers.

"It saves our customers tremendous amounts of money, because it is pay-go,'' he said.

Silagy, who was attending an Enterprise Florida meeting in Tallahassee, said utilities need to make long-term decisions, such as investing in nuclear power, to meet future demands. He also said it is important not to have a "knee-jerk reaction" to the nuclear-cost recovery law.

"We're doing what we said we were going to do," he said.

Opponents such as Rehwinkel Vasilinda and Fasano, however, have focused on the costs being passed along to consumers. After the Public Service Commission approved the amounts for this year, Rehwinkel Vasilinda issued a statement describing the law and its handling by regulators as an "epic failure."

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