On nuclear rate hikes, Iowa can learn from Florida’s problems

By Mike Fasano

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Iowa State senators are considering allowing a private utility to raise electric rates so it can fund the construction of new nuclear reactors.

I understand the temptation to vote for such a bill - in fact, in 2006, as a member of the Florida Senate, that's exactly what I did. But I've since learned my lesson, and I hope Iowa's senators will too, before the Iowa Senate makes a decision it could deeply regret.

In 2006, the Florida Legislature passed a bill that included a provision allowing investor-owned utilities to charge ratepayers for construction costs for new nuclear reactors - even before the reactors are built and delivering power. We thought this was a good way to spur new electricity generation in our state.

I voted for the legislation based on the information and analysis of costs provided at that time. But the cost estimates we were provided weren't accurate, and costs have escalated three to four times. The reactors still aren't built, and just last week we learned that the utility that pledged to build them is canceling its construction contract. That means Floridians are left footing the bill - an increase of as much as $50 per month or more per family - for reactors that may never exist.

The same thing could happen to Iowans if senators and citizens aren't vigilant.

Florida's law is bad for consumers and bad for our state. That is why I am now sponsoring a bill that would prevent advanced cost recovery for nuclear reactors.

Protecting consumers is something people across the political spectrum can agree on, and that's why I'm working closely with Democratic state Rep. Michelle Rehwinkel-Vasilinda. This isn't and shouldn't be a partisan issue. When a private firm tries to force the consumer to shoulder the risk for its investments - even though the private firm gets to keep any profit - public officials should say no.

And I doubt many Iowans see things differently.

When I originally supported my state's advanced cost recovery bill, I never thought the Florida Public Service Commission would turn a blind eye to the high risks associated with such capital-intensive and complicated projects. Now the industry is telling Iowa senators not to worry about consumers being bilked, because the Iowa Utilities Board would provide an independent check on rate hikes. Well, if it wasn't true when the utility said it in Florida, why would you trust a utility when it says the same thing in Iowa?

According to filings, some Floridians could now see an increase of nearly $50 per month per 1,000 kilowatts of power by 2020. Many people use 2,000 kilowatts or more, so their increases would be much higher. Naturally, larger electricity users, such as businesses and industrial users, will pay even more. Those on fixed incomes, especially senior citizens, will have a difficult time adjusting to such increases.

I traditionally have supported nuclear projects. But funding these dicey investments ought to be the responsibility of utility shareholders and their investment partners who profit from them, not the average ratepayers who are already struggling to pay their monthly utility bill or keep their business afloat.

Why should people pay now for something that may never benefit them? We in Florida have learned our lesson the hard way. Iowans who take note of what happened here don't have to.

Mike Fasano is a Florida Republican state senator from New Port Richey, Fla. Comments: fasano.mike.web@flsenate.gov