Nuclear power: Learn from Florida’s mistakes

By Sen. Mike Fasano

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I understand that the Iowa General Assembly is considering legislation to allow early cost recovery for new nuclear power generation. I write to share how we in Florida learned the hard way that such legislation is bad for consumers and bad for our state and why I went from being a supporter of similar legislation to the prime sponsor of legislation to repeal it.

As a staunch advocate for consumers here in Florida, I believe that protecting our citizens' pocket books, particularly in these trying economic times, is of the utmost importance. In Florida, allowing utilities to recover the costs of a new nuclear power plant before the plant was even placed in service has been unfair to consumers and bad public policy.

Allowing utilities to charge customers for new power plant construction work in progress will hurt already strapped Iowa consumers. Florida's experience promises large increases in electric bills. According to Progress Energy filings with the Florida Public Service Commission, an average Progress customer could see an estimated increase of nearly $50 per month by 2020 from the Levy County project capital additions. People with bigger homes or business will pay even more.

I am a conservative, pro-business legislator. In 2006, the Florida Legislature passed a bill - SB 888 - that included provisions allowing utilities to charge ratepayers for new power plant construction costs before a plant is put in service. This bill is similar to provisions being considered now in Iowa to allow advanced cost recovery.

I voted for our legislation in 2007, based on the information and analysis provided at that time. However, as I have become aware of the law's consequences to ratepayers, I changed my mind about the wisdom of such a policy.

Last January, I sent a letter to the Florida Public Service Commission asking for a refund for customers given the announced delay of Progress Energy's proposed Levy County project after a rate hike request was denied. Because of my deep concern about these rate impacts, I am the prime sponsor of a bill in our current legislative session that would repeal provisions relating to cost recovery for siting, design, licensing and construction of new nuclear and integrated gasification combined cycle power plants.

I believe that it is inherently unfair for utilities to shift the risk to their customers, our constituents, to front the costs of massive and expensive construction projects that are not even guaranteed to be completed. These dicey investments ought to be the responsibility of utility shareholders and their investment partners who profit from them, not the average ratepayer who is already struggling to pay their monthly utility bill or keep their business afloat.

By further allowing these corporations' unrestricted ability to pass on the costs of new power generating facilities, without guaranteeing that these facilities will ever actually operate and provide power to customers, policymakers are placing undue financial burden where it doesn't belong.

Every dollar a citizen keeps in his pocket instead of sending to the power company is a dollar that can help strengthen the state's economy. I believe it is our duty to protect our consumers and let corporate risk be appropriately placed where it belongs - with the shareholders.

Iowa should learn from Florida and avoid making the same mistakes that will result in giant rate increases for consumers.

Florida state Sen. Mike Fasano is a Republican who has represented the 11th District since 2002. He was President Pro Tempore of the Florida Senate from 2008-2010. He also served in the Florida House from 1994-2002 where he was the Majority leader from 2000-01. Comments: fasano.mike.web@flsenate.gov