Progress drafts nuclear bills

The utility wants to speed up passing through costs to consumers, saying it will save consumers money.

Published March 30, 2006

Progress Energy Florida is not only mulling the construction of a new nuclear plant, it is trying to make it easier to build one.

The Florida Legislature is considering bills drafted by the St. Petersburg utility that would allow the company to pass through to customers licensing fees and other preconstruction costs earlier than is possible now. The legislation would streamline getting permission to build nuclear plants and related transmission lines.

Progress' push comes as it continues its search for a location to build a nuclear plant in Florida, a decision it expects to make by the end of June.

The legislation reflects Progress' desire to reduce some of the risk and cost associated with building a nuclear plant, a huge project that can take about a decade to complete from the selection of a site to the generation of electricity, said Progress spokesman C.J. Drake.

"This is a multibillion-dollar investment we are planning to make in Florida," Drake said. "It's not a natural gas plant. It's not a coal plant. Something like this hasn't been attempted in a generation."

The legislation has been introduced in the House by state Rep. Frank Attkisson, R-Kissimmee, and in the Senate by state Sen. Carey Baker, R-Eustis.

Rules now stipulate that utilities can only seek to pass through such costs to customers after a power plant begins operations.

Costs that a utility could pass through to customers earlier would include licensing and review fees charged by the U.S. Nuclear Regulatory Commission, equipment expenses and the cost of land, as well as interest charges once construction begins.

Recovering costs in this fashion would reduce the financial risk to Progress, while translating into lower costs to customers over the long term, Drake said.

That's because the costs collected upfront would not be included later in Progress' rate base.

Utilities earn a rate of return on their rate base, which represents the net value of their assets, such as power plants, substations and power lines. The legislation would exempt nuclear plants from state bid rules for power plant construction.

As a result, state utility regulators wouldn't consider alternative plant proposals from other power companies.

In addition, Progress would not have to demonstrate "extraordinary circumstances" to increase its initial cost estimate to build a nuclear plant.

The legislation would reduce the ability of municipalities and counties to block the construction of transmission lines associated with a nuclear plant, including noncontiguous lines that have to be upgraded.

Rather than having to contend with multiple hearings to determine whether new transmission structures conform with local land-use laws, all such concerns would be addressed in a single hearing presided over by an administrative law judge at the state Department of Environmental Protection.

Attkisson said he introduced the legislation because expanding nuclear power in Florida will help diversify the fuel sources of the states' utilities.

That, in turn, would reduce the state's vulnerability to increases in fossil fuel costs and foreign energy sources.

"This is a statewide issue," he said. "This is not a local issue, so we're trying to treat it as a statewide issue."

Louis Hau can be reached at 813 226-3404 or hau@sptimes.com