Regulators deal with FPL nuclear license, costs
TALLAHASSEE, Fla. – Grappling with a long-discussed nuclear project in Miami-Dade County, state regulators Tuesday backed Florida Power & Light continuing to pursue a critical license for two new reactors -- but turned down a company request involving costs.
The decisions by the state Public Service Commission were the latest chapter in years of controversy about a 2006 law aimed at increasing nuclear power in the state and FPL's subsequent proposal to build the reactors at its Turkey Point complex. Julie Brown, who chairs the Public Service Commission, pointed Tuesday to key issues surrounding the project.
“Whether the (2006) statute has worked out for customers is a question that everyone has,” Brown said. “And whether Turkey Point 6 and 7 (the proposed reactors) are going to come online and are feasible, are practical, are realistic is a question that we as regulators have. Like it or not, nuclear power has been (a) very important (part) of our fleet over decades for many, many Floridians. It's provided clean energy, it's been reliable.”
The issues confronting the commission Tuesday were rooted, at least in part, in the 2006 law, which allowed utilities to recover money from customers during the early stages of work on nuclear projects. That is different from the way utilities typically recoup money after power plants are finished and start producing electricity.
As of the end of 2016, FPL had spent $260 on licensing efforts for the reactors and is likely within months of receiving a critical federal approval known as a “combined operating license,” according to a Public Service Commission staff recommendation.
But in a filing this year, FPL proposed what it described as a “pause” in recovering project costs incurred after Dec. 31, 2016. The request effectively sought to defer for a number of years costs that customers would pay and temporarily eliminate the need for annual regulatory hearings on the project.
Opponents of the request, however, argued FPL had not submitted a needed study that would show whether the nuclear project is feasible. They contended that the company should not be allowed to continue running up costs and then be able to come back in the future and recover the money from customers under what is known as the “nuclear cost recovery clause.”
Public Service Commission staff members recommended rejection of the utility's request to defer costs without the feasibility study. Commissioners went along with that recommendation Tuesday, turning down FPL's proposal in a 4-1 vote, with Commissioner Gary Clark dissenting.
FPL customers also will not pay any nuclear costs in 2018. Commissioners made clear, however, that FPL might have other avenues in the future to try to recoup the money it is spending on the combined operating license -- outside of the nuclear-cost recovery clause. That could include seeking recovery through the process of setting base electric rates.
State Public Counsel J.R. Kelly, whose office represents consumers in utility cases, expressed concern after Tuesday's meeting that FPL could seek the money through another route. Kelly's office opposed allowing the deferral of costs.
“Are you giving the utility two bites at the apple?” Kelly said. “And we think that would be inappropriate.”
During the meeting, the commission also unanimously supported a finding that it is reasonable for FPL to continue pursuing the combined operating license. Commissioner Art Graham said the license would provide a long-term option for the utility to eventually build nuclear reactors.
“I think the COL is basically a 20-year option,” Graham said. “Are we going to do it in the foreseeable future? Are we looking to have that option on the table? And I think we've come this far, you need to have that option on the table.”
Brown and Clark said the state has become increasingly dependent in recent years on natural gas to fuel power plants, suggesting that it might need nuclear power to help diversify in the future. They also pointed to the large amount of money already spent on seeking the license.
“I think that the continued pursuit of this license is critical from an infrastructure standpoint, from a base-capacity standpoint,” Clark said. “Our current dependence on natural gas is extremely alarming to me.”
FPL spokesman Mark Bubriski released a statement after the meeting saying the utility will continue pursuing the license from the federal Nuclear Regulatory Commission.
“We have a responsibility to provide for the energy needs of our customers today and well into the future,” the statement said. “As we invest in high-efficiency natural gas energy and one of the largest solar expansions on the Eastern seaboard, we continue to believe having the option to add clean, zero-emissions nuclear energy is important for Florida's energy future.
“After nearly a decade of working through lengthy, stringent regulatory processes at the local, state and federal levels, we are on track to receive final approval from the federal Nuclear Regulatory Commission in the coming months, and we intend to complete the licensing process such that the option of new nuclear power is available for our customers for many years into the future.”
The utility also touted a less-controversial move Tuesday by regulators that approved a $7.3 million rate reduction for customers in 2018. That reduction stems from what is known as an “over recovery” of nuclear-project costs from customers in 2015 and 2016.
News Service of Florida