Florida’s electric utilities under fire

Can outrage at Duke Energy and nuclear cost recovery affect next year’s elections?

When St. Petersburg attorney Dwight Dudley decided to run for a seat in the state Legislature last year, plenty of issues fueled his candidacy.

Nuclear cost recovery wasn’t one of them — at least at first.

But his opponent’s support of legislation allowing utilities to charge for such costs turned out to be a winning issue for Dudley — and this weekend a protest in downtown St. Pete will underscore why the issue may have more political weight than ever.

Here’s the back story:

In 2006, at the bequest of energy companies like Progress Energy and Florida Power & Light, the Florida Legislature voted for a “nuclear cost recovery clause,” which allowed utilities to charge customers for planning and building nuclear power plants before they received federal approval, and did not require power companies to reimburse customers if the plants never came to fruition. Similar laws were passed at that same time in North and South Carolina.

That worst-case scenario played itself out last month, when Duke Energy (which merged with Progress last year) pulled the plug on a proposed nuclear reactor planned for Levy County, leaving ratepayers in Florida with a tidy $1.3 billion bill for a plant that may never be built. It followed Duke’s decision in February to close its Crystal River nuclear plant in Florida after workers cracked a concrete containment building during an attempt to upgrade the plant in 2009.

But well before Duke did that, Dudley opted to make his GOP opponent in the House District 69 race last fall, Frank Farkas, the living embodiment of the 2006 law. Through opposition research, Dudley learned that Farkas had helped shepherd the bill through the legislature (it was actually an amendment to another bill). But when he began attacking Farkas (calling it the “Farkas Fee”) the Republican’s response was simply “to justify his actions,” according to Dudley.

The result? Dudley took the open seat by a 51-44 percent margin. Granted the redrawn district had gone strongly for Barack Obama in ’08 and again in 2012, but it was the first time political observers could remember energy becoming such an explicit political issue.

The question now for Florida environmentalists who are weary of the state lagging behind the rest of the country in employing alternative sources of power and rewarding conservation is: Can the politics of energy play out in 2014?

One candidate is hoping it will work in 2013.

Amanda Murphy, a 43-year-old financial planner, is running as a Democrat in the special House District 36 seat recently vacated by Mike Fasano, who was appointed Tax Collector in Pasco County. She says that nuclear cost recovery is one of the most frequently mentioned issues as she canvasses Pasco neighborhoods campaigning for the seat. Murphy says a full repeal of the law would benefit everyone in her district, from small to large business owners to the school system and everyone else when it comes to their energy bills.

Murphy says the intention of the 2006 law was good, but “now they just want to keep taking the money from us for a new project that they don’t even have in place yet. Come on.”

Pasco County’s most powerful Republican is Will Weatherford, the current Speaker of the House. In a speech given to the Suncoast Tiger Bay Club in St. Petersburg earlier this month, he justified why both the power companies and the Legislature thought it was a good deal at the time, but admits in retrospect that it was “not a wise decision.”

But nuclear power was on the ascendancy in the mid-aughts. For the first time in decades, power companies were talking about building new nuclear plants. As Weatherford recounted, Florida was a different place then, with natural gas prices two to three times higher than today, a growing population of about 1,000 people coming into the state every day, and nobody worried about tsunamis hitting Japan. But now, he confesses, “The world absolutely changed when it came to nuclear energy.”

But not everybody sees it that way. Duke Energy certainly doesn’t.

The North Carolina-based power company isn’t new to the concept of charging customers to help pay for nuclear plants before they’ve been constructed. That’s because as noted above, North Carolina law also allows Duke to petition the N.C Utility Commission for recovery of nuclear construction costs before they are completed in what is known as Construction Work in Progress (CWIP). And recently Duke CEO Lynn Good has been lobbying for a revised version of that law that would require ratepayers to pay nearly automatic annual increases even if those reactors are never completed.

Dudley’s election victory brought more attention to nuclear cost recovery, creating enough momentum that Republican legislators finally attempted to do something about it in this past legislative session. The bill pushed by Clearwater Senator Jack Latvala would decrease the amount that utilities could charge for nuclear power, but the Weatherford-led House removed a section that would have required refunds if the power companies failed to complete such plants.

“I don’t think going back and making them write a big check for every dollar they ever collected on cost recovery is feasible or the right thing to do,” maintained Weatherford at Tiger Bay.

But removing that provision angered critics like Dudley, who called the bill passed this year “a little bit of eyewash where we need a tourniquet.”

Like Dudley, Tallahassee-based Representative Michelle Rehwinkel Vasilinda also refused to support the Latvala-sponsored bill, saying she didn’t think it went nearly far enough. The Democrat has filed once again for a full repeal of nuclear cost recovery, something she’s done for several years now. But she says it’s going to take a grassroots effort by everyday Floridians for the Legislature to go any further.

Enter Kate Melgus. The Greenpeace field organizer in both Ohio and Florida is leading a protest march this Sat., Sept. 28, in front of Duke’s St. Petersburg-based offices.

She says repeal will require people power.

“Ratepayers are out an absurd amount of money, and folks are really, really, really upset about it,” says Melges, a Clearwater native who has worked with the environmental group for the past two years. “Folks are upset about it, and they’re looking for ways to express their anger.”

The protest is scheduled just days before the Florida Public Service Commission discusses the Crystal River plant and recent repair costs on Oct. 1.

And what about creating grassroots support for investor-owned utilities to look seriously at efficiency and alternative energy sources?

That’s where the Clean Energy Congress 2.0 kicks in, an all-day event in Tallahassee designed to do just that.

“The policy-makers in Tallahassee and the regulators are not providing the kind of leadership that Florida needs to meet our energy needs in a more sustainable way,” says Susan Glickman of the Southern Alliance for Clean Energy, one of the two main sponsors of the event (the other is ReThink Energy Florida). Glickman says the heavy political influence of companies like TECO and Duke Energy, with their large campaign contributions to members of both parties, give them the clout to protect unpopular laws like advanced nuclear recovery.

Florida has regressed significantly from just four years ago when a Renewable Portfolio Standard (RPS) passed in the Florida Senate but died in the House. That would have required the state’s utilities to produce 15 percent of their energy from renewable sources, along with an additional 5 percent nuclear as part of a “clean energy” standard. The following year the Florida Renewable Energy Producers Association called on then Governor Charlie Crist to ask the Legislature to put on the fall election ballot a constitutional amendment to require utilities to produce at least 20 percent of their electricity using renewables by 2020. But the governor, already shifting to the right as a surging Marco Rubio was coming on, dropped the idea.

According to the Center for Climate and Energy Solutions, 38 states have some form of an RPS or Renewable Alternative Energy goal.

Duke spokesman Sterling Ivey says that the company is pursuing renewable energy alternatives but says “renewable [resources] cannot produce the output to meet demand and are currently more expensive than traditional generation,” adding that this is particularly acute in the Southeast “where our renewable resources are limited.”

Former USFSP political science professor Daryl Paulson says energy issues could make a difference in some political races around the state — not because of the energy factor, but the economic one.

“If you can say this literally was an economic issue that took money out of the hands of low-income families as well as middle and upper-income families to the advantage of Duke Power and to the disadvantage of every Floridian, then you’ve got a a case where you can really exploit that as a political campaign issue.”

For more information on the Clean Energy Congress taking place on Oct. 7 in Tallahassee, go to cleanenergycongress.com. The Rally For Florida Ratepayer Refund takes place Sat., Sept. 28 at 10:30 a.m. at 299 First Ave. N. in St. Petersburg.


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