Florida Power & Light has told state officials that it will put a four-year pause on its construction plans for two proposed nuclear power plants at its troubled Turkey Point site but it wants the state to waive a requirement that it prove the project is still “feasible” in order to charge customers in advance for it.
“The analysis would impose a substantial hardship upon FPL and violate principles of fairness,” FPL wrote in an motion filed April 27 with the Florida Public Service Commission.
This week, the City of Miami, consumer groups, environmental advocates and some of the state’s largest electric power users, urged utility regulators to reject the FPL request for a waiver, saying the company should be required to justify whether it is allowed to continue charging customers for the $20 billion expansion project that may be halted.
“If a project is no longer feasible or practical, then the costs incurred are not prudent,” wrote City of Miami attorney Victoria Mendez in a motion filed with the PSC on Tuesday. Since FPL plans to recover the cost of the project, she said, “while doing no additional work towards the completion of the project, it is imperative that FPL demonstrate the project is still economically feasible and practical.”
The future of FPL’s planned nuclear expansion project has become inevitably tied to the clean-up of an underground saltwater plume that threatens South Florida’s drinking water supply. The plume is suspected to have been caused by the utility company’s 2013 nuclear plant expansion, intended to increase power output by 15 percent, which overheated the canals and increased salinity of the water.
The company submitted its proposed 10-year clean-up plan to state and local regulators on Monday. Meanwhile, FPL has been planning the expansion of two new nuclear power units — Units 6 and 7 — at the Turkey Point site on Biscayne Bay since 2008. Using a “nuclear cost recovery” law it helped to push through the Legislature in 2006, it is allowed to charge customers in advance of the project’s construction — $281 million for the planning and licensing costs so far. This year, it is asking to be able to charge customers another $22 million in 2017.
In 2013, after Duke Energy customers spent more than $1.5 billion financing a failed nuclear project, the Florida Legislature revised the law to require utility companies to prove that a nuclear project is feasible before the Public Service Commission gives the company permission to move into the “preconstruction” phase of the project.
“This annual feasibility analysis serves to safeguard customers from potentially paying millions of dollars over numerous years on a project when the long-term feasibility analysis may show that it is no longer viable going forward, and, accordingly, may be abandoned,” wrote the Florida Office of Public Counsel, which represents the public in rate cases in its motion filed Monday.
In the April 27 waiver letter, FPL did not mention its troubles with the cooling canal system at Turkey Point but said that because it is in the midst of trying to “maintain a license,” for the current plant, requiring the company to finance a feasibility study for the future units is “a substantial hardship.”
Two weeks later, in a May 11 deposition in the PSC case, FPL officials said that the company intends to continue to charge customers for the new nuclear power units while it puts construction plans on hold until 2020.
FPL told senators at a hearing in Miami last month that it expects the cost of the clean-up to be close to $50 million this year and it will ask state utility regulators to let customers pay for the effort.
Meanwhile, the PSC will decide at a hearing Aug. 10-12 whether FPL will be allowed to continue to charge customers for the nuclear plant expansion. Another hearing is scheduled later in August to hear FPL’s request for a 23.7 percent increase annual customer rates.
FPL said it expects to be granted its license for the two new nuclear units in 2017 but, once federal officials grant the license, the company “will not move immediately into the ‘preconstruction work’ phase” but instead maintain its “current state.”
Meanwhile, how and who will pay for the clean-up costs of the polluted cooling canals remains a question. FPL has said it will ask the PSC for approval to have customers pay for the clean-up but the company has not yet filed any petition to recover costs, said Cynthia Muir, PSC spokeswoman.
State Rep. Jose Javier Rodriguez, D-Miami, has urged regulators to reject all rate or fee increases sought by FPL until the issues related to the salinity of the cooling canal system is resolved.
He also called on FPL to withdraw the rate case and have its shareholders bear the cost of the contamination, not customers.
“Putting it simply, it is inappropriate to seek higher profits from your customer base at a time when my constituents and all South Florida residents continue to be impacted by these failures at Turkey Point,” Rodriguez wrote in a letter to FPL president Eric Silagy on May 4.