A large rate increase by our electric utility, Progress Energy Florida, has just been put in place. This increase, approved by the Public Service Commission, is composed of two parts:
●
an increase to compensate for the higher cost of fuel (mainly natural gas and coal) used by the utility
●an increase in “energy charge” (plant operations, etc.) mainly to provide funding for the development of a nuclear electric plant, to be put in place in 2016.
However, the charges placed on consumers for the development of the planned nuclear plant will continue to rise in future years. We believe those charges are grossly unfair, and we recommend that all residents contact their state legislators and demand that they take action to overturn this grievous wrong.
Cost Recovery for Planned Nuclear Plant: In 2006 the Florida Legislature passed legislation, the Florida Energy Act, Florida Law Ch 2006-230, authorizing utilities to increase electric rates to provide up-front funding for the development of new nuclear plants. That act eliminated the need for utilities to invest their profit money to provide the capital for new developments, and placed the risk directly on the shoulders of the consumers. In fact, if PE should decide in the future to cancel the nuclear plant development, they are authorized to recover all money expended to that point on the project. We should all be able to gamble like that, without any risk - except, the risk is taken by the public! The following table, from a Public Service Commission memo of July 2, 2008, shows the projected impact of the nuclear plant on monthly customer billing:
Poinciana Residents for Smart Change
Progress Energy Raises Rates by 25%
Latest Status:
PRSC Adopts Position
By the time of the final briefing by PE to the Public Service Commission, the 2009 figure had increased to $11.42. In addition, this table clearly shows that the 25% rate increase for 2009 is just the “tip of the iceberg” and future rates will be substantially higher.
Further Increases Ahead: In 2005 the Florida Public Service Commission (PSC) approved an agreement that would maintain Progress Energy Florida's base rates at their current levels for a period of 4 years. The agreement had been negotiated among Progress Energy Florida, the Florida Attorney General, the Office of Public Counsel and other parties. That agreement is now terminating and we understand PE plans to file a request with the PSC in March 2009 for an additional rate increase. It is expected that hearings will be held in April and May. We believe that PE is completely unrealistic and ignoring the economic plight of many Floridians in today’s severe recession. PE currently enjoys an extraordinary return on equity ~ some 14% (ref Google Finance, latest quarter Sept '08), matched by very few companies today.
There Is No Control Over PE: The PE estimate is non-binding according to Florida law (FL Law Ch 2006-230). The same law provides the right for costs to increase without challenge, as stated in FL Law 2006-230, Section 43, (4)(e):
"...the right of a utility to recover any costs incurred prior to commercial operation, including, but not limited to costs associated with the siting, design, licensing, or construction of the plant, shall not be subject to challenge unless and only to the extent the commission finds...that certain costs were imprudently incurred....Imprudence shall not include any cost increase due to events beyond the utility's control".
What We Believe: The Poinciana Residents for Smart Growth advocate the elimination of the high set-aside for the future nuclear plant. PE should invest its high profits into this investment for the future, rather than putting the burden on the public. This investment, under the most optimistic assumptions, will not pay off for over 25 years after the plant is completed. We also oppose the additional rate increase PE is planning for next year. Our residents are facing a terrible economic hurdle in today’s recession and can’t stand to have further increases in cost. Retirees are particularly hard hit.
What Can We Do About It?: A large number of consumer advocates and industry advocates have come out against the current rate hike. These include the Southern Alliance for Clean Energy, the Office of Public Counsel, and the Florida Industrial Power Users Group. They have been joined by a number of legislators. State Senator Lee Constantine, who sponsored the bill that provides up-front funding for such investments, now says that he would like to change the law to spread the cost impact out over a longer period of time. Senator Mike Fasano of Port Richey, the Senate President Pro-Tempore, now says his vote was a mistake and, together with representative Peter Nehr, has requested Progress Energy to withhold implementation of the rate hike. Their request was denied by PE.
New Legislation: Senator Fasano and Representative Nehr are now drafting new legislation to be introduced to the legislature in the coming session to overturn the grievous law that has permitted this rate increase to occur. We ask our state Senator, Paula Dockery and our Representatives John Wood and Stephen Precourt to support this initiative and carry the fight to the legislative floor to stop this madness!
Contact Your Legislators: To show your opposition to this unfair rate increase, contact your state legislator as shown below:
Senator Paula Dockery:
dockery.paula.web@flsenate.gov
; Phone (863) 413-2900
Representative John Wood (Polk County):
john.wood@myfloridahouse.gov
; Phone: (863) 419-3470
Representative Stephen Precourt (Osceola County):
steve.precourt@myfloridahouse.gov
; Phone: (407) 814-6138
