Florida utilities recover costs for nuclear projects

25 October 2011

Florida regulators have 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 $280 million from customers in 2012.

 

Levy Artist's Impression (ProgressEnergy)
How the new Levy plant could look (Image: Progress)
The Florida Public Service Commission (PSC) said that it had agreed to allow Florida Power & Light (FPL) and Progress Energy Florida to recover the cost of the new nuclear generating capacity from customers "to help secure a diversified and stable energy future" for the state. Customers will pay towards these costs through the 'capacity cost recovery charge' on their bills beginning in January 2012.

 

The PSC has approved Progress' recovery of $85.9 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 commission, the uprate projects will add 2380 MWe of new nuclear base load generation. Levy units 1 and 2 - both Westinghouse AP1000 reactor units - are scheduled to start up in 2021 and 2022, respectively.

 

The commission said that a stipulated agreement - approved in August and included in its decision - saves Progress customers $500,000 in project management costs for adding capacity to Crystal River unit 3. The stipulation - between Progress, the Office of Public Counsel, and other interveners - resolved whether the company prudently managed the uprate licence agreement.

 

Meanwhile, the PSC has approved FPL's recovery of $196.1 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 2022 and 2023, 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. Over the life of the generating units, the commission estimates, the additional capacity projects will save Progress customers between $155 million and $1.5 billion.

 

As a result of the PSC's approval, customers of Progress are likely to pay about $2.93 month for the first 1000 kilowatt-hours (kWh), while FPL's customers will pay about $2.20 per month. The final approved amount for customer bills, however, will be recovered through the fuel and capacity cost recovery charge on customer bills beginning in 2012.

 

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.

 

Researched and written

by World Nuclear News

 

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