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Senators reject efforts to repeal so-called 'nuclear tax'

Some call it a nuclear tax. Others call it a fee.

Whatever the name, Florida legislators decided Monday they don't want to take it off the electricity bills of Progress Energy and Florida Power & Light customers -- even though the companies gave legislators no guarantees that they will build the nuclear plants the money is being collected to construct.

The Senate Communications, Energy and Utilities Committee voted down a proposal by Sen. Mike Fasano, R-New Port Richey, Monday to repeal the so-called nuclear cost recovery clause embedded in customer bills. 

Fasano, who has tried and failed to repeal the proposal since 2007, said the "nuclear tax" is a giveaway to utility companies with nothing in return for customers. He said Progress Energy has collected more than $500,000 towards the construction of two proposed nuclear plant in Levy County but recently cancelled its construction contract with the company slated to build the units while FPL customers have paid a similar amount.  

“The bottom line is Progress Eenrgy will never build those nuclear power plants,’’ Fasano said. “If we don’t take away that cost recovery charge customers will continue to be charged for over $1 billion and we’ll never see those dollars back once those plants are not built.”

Fasano said that when lawmakers authorized the Public Service Commission to impose the nuclear cost charge in 2006, Progress Energy expected the plant would cost between $6 bilion and $8 billion and be completed within a decade. By last year, the projected costs had soared to $22 billion and the start date climbed to 2021.

“Unfortunately, we can’t go back in time and reimburse the customers,’’ he said. Fasano noted that Florida is the only one of two states in the nation allowing utility companies to assess a tax or a fee to build nuclear power plants.

Fasano attempted to add the repeal to a broad energy bill sponsored by the Senate Communities, Energy and Utilities Committee that would renew tax incentives to businesses and homeowners that invest in renewable energy.

Susan Glickman of the Southern Alliance of Clean Energy, told the committee that Wall Street calls the arrangement Florida has with the utilities "dumb money,'' a practice by which customers loan money to utilities companies without having to show a return or having to pay capital costs.

"Neither of the utilities has guaranteed that they are committed to building these projects,'' she said. 

When the law was passed in 2006, former Gov. Jeb Bush was pushing fuel diversity, the economy was booming and there appeared to be a need for more energy generation, Glickman said. Today, by contrast, Florida's utilities have the ability to generate 30 percent more energy capacity than is being used.

"We need to get rid of this unfair practice which privatizes the profits and socializes the risk,'' she said. "You've taken the risk off of the utilities -- these Fortune 500 companies -- and you're putting it onto ratepayers who can ill-afford it at this time.''

Sen. Ellyn Bogdanoff, R-Fort Lauderdale, suggested, however that, if the utilities "are going to take the money from the taxpayers up front there would be some benefit on their rate,'' later.

Sen. Andy Gardiner, R-Orlando, agreed. "If we want nuclear power when are we going to pay for it,'' he said, urging the committee to reject Fasano's amendment to the bill. "If you wait, when are you going to pay for it? Is the rate increase higher?"

Fasano and Sen. Evelyn Lynn, R-Ormond Beach, were the only senators to support the amendment on a voice vote.

Voting to oppose the amendment were Gardiner, Bogdanoff, Sen. Miguel Diaz de la Portilla, R-Miami, Sen. Lizbeth Benaquisto, R-Fort Myers, Sen. Thad Altman, R-Viera, Sen. Greg Evers, R-Baker, Sen. Oscar Braynon, R-Miami, Sen. Arthenia Joyner, D-Tampa, Sen. Gwen Margolis, D-Miami, Sen. Joe Negron, R-Stuart, Sen. Chris Smith, D-Fort Lauderdale.