Florida nuclear utilities recover expansion costs

19 October 2009

The Florida Public Service Commission (PSC) has approved cost recovery amounts for the state's two largest utilities related to the construction of planned nuclear power reactors and uprates of existing reactors. The utilities will be able to collect more than $270 million from customers in 2010.


Levy Artist's Impression (ProgressEnergy)
The proposed Levy plant (Image: Progress)
The PSC voted on 16 October to allow Florida Power & Light (FPL) and Progress Energy Florida to recover the cost of the new nuclear generating capacity from customers through the 'capacity cost recovery charge' on their bills beginning in January 2010.


The commission has approved FPL's recovery of $62.7 million in costs, including those associated with the uprate of four of its existing reactors - Turkey Point units 3 and 4, and St Lucie units 1 and 2 - and the construction of its proposed Turkey Point units 6 and 7. These completed uprate projects will add 2614 MWe of new nuclear base load generation, the PSC said. The new Turkey Point units, with a combined capacity of between 2200 MWe and 3000 MWe, are scheduled to begin operating in 2018 and 2020, respectively.


In addition, the commission has said that Progress can recover $207 million in costs, including costs associated with the uprate of its existing Crystal River nuclear power plant and the construction of its proposed two-unit Levy plant. According to the PSC, the uprate projects will add 2380 MWe of new nuclear base load generation. Levy units 1 and 2 - both Westinghouse AP1000 reactor units - are expected to begin operating in 2016 and 2017, respectively.


As a result of the PSC's approval, customers of FPL are likely to pay about 67 cents per month for the first 1000 kilowatt-hours (kWh), while Progress' customers will pay about $5.86 per month. The final approved amount for customer bills, however, will be determined after the PSC's decision in the annual fuel cost recovery clause hearing beginning 2 November.


The Florida legislature enacted a law in 2006 to encourage the development of nuclear power by allowing cost recovery for some nuclear plant project costs during the construction process, rather than once the plants begin operating.


Upon PSC approval of a utility's need for a nuclear plant upgrade or new plant construction, the utility can petition for cost recovery under the new commission rule adopted in February 2007. The PSC approved FPL's plan to uprate its four existing reactors (two pressurized water reactors each at Turkey Point and St Lucie) in December 2007. In March 2008, it also approved FPL's plan to construct two more nuclear power reactors at Turkey Point. In July 2008, the PSC approved Progress' plans for a new nuclear power plant in Florida.


In late 2008, the PSC approved cost recovery amounts for these projects of just over $220 million for FPL during 2009 and some $418 million for Progress during 2009.


PSC chairman Matthew Carter commented: "Nuclear power provides fuel diversity and will save Florida residents money on future utility bills." He added, "The legislature enabled utilities to plan for tomorrow by spreading the rate impact over time. Utilities have to begin spending now to meet future power needs that will keep the lights on for us, our children, and our grandchildren at prices we can afford."


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