FPL seeking PSC "determination of need"
As Atomic Insights readers may remember, I have a lifelong association with FPL (Florida Power and Light). My Dad worked as an engineer for the company for 35 years – starting well before I was born. Dad passed away just one month after he retired, so it is almost completely accurate to say that the company was always a big part of his identity.
I will never forget the first Tuesday of the month – that was the day that Dad got to stay home a bit later than usual and wore casual clothes to work so he could go to “storm training”. As an employee of a power company in a hurricane prone area, part of his duty was to be ready to head out when most people are either hunkering down or hanging out at home waiting for the power to come back on.
I have vivid memories of company picnics at the Cuttler Plant site and Christmas parties where each employee child received a gift from Santa Claus based on sex and age. My mom, who has been a key supporter of AAE for many years, has stood up (more than once) at company stockholder meetings and asked when FPL was going to build some new nuclear plants. Until recently, the answer was always a bit wishy washy, but that is now changed.
According to an article published in the Miami Herald published on Wednesday, October 17, 2007,
FPL moves to add nuclear plants in S. Dade:
Florida Power and Light took a major step toward building two new nuclear reactors in South Miami-Dade..
The major step was filing an application with the state Public Service Commission to obtain a “determination of need”, which is a key regulatory step in a state where the electric utilities are still fully regulated monopolies with a defined service territory and a responsibility to serve.
That responsibility to serve is important, it is a part of the agreement that the company has with its customers. The customers, as represented by the state Public Service Commission, require that the company make prudent plans and appropriate investments in order to ensure that the lights keep coming on when people want them on. In return, the customers agree to pay the company a price for the manufactured product that they are purchasing that is high enough for the company to recover its costs with a specified rate of return.
In Florida, that cost recovery capability has recently been clarified to include the costs associated with building new plants, even before the plants are operational. Ruth Sponsler over at We Support Lee has a good post that describes the importance of this kind of cost recovery: Will North Carolina Follow Florida’s Lead in Financing of Major Utility Projects?
Of course, there is obviously some potential for misuse of this provision by having ratepayers pick up the tab for building plants that might be unnecessary to serve their needs. A profit driven company might try to build excess capacity that could be sold on the open market, or they might just inflate costs. In a regulated environment, increased cost leads to increased profit since it is a fixed percentage above the cost.
That is where the regulators come in; they provide an independent assessment of the need for the plant. If they agree that it is necessary and a wise investment from the standpoint of providing reliable, reasonable cost electricity – including environmental cost considerations – then the project can move forward.
Because of this process, FPL has told the NRC that it will be submitting its federal license application in 2009. Approval for cost recovery for “construction work in progress” is worth the wait. I know that my support of this process sort of violates my libertarian tendencies, but it is a proven process that works in terms of providing electrical power whenever the customer needs it with some constraints on the kind of excessive selfishness that some businessmen have demonstrated. As one of my daughters told me a long time ago in a very serious 4-year old voice, “I never want to live somewhere where there is no power”.
Here is a summary of the lengthy and detailed application that FPL has filed:
”Additional nuclear energy can help supply reliable, affordable power to our customers while avoiding greenhouse gas emissions that scientists have determined contribute to climate change,” FPL President Armando Olivera said in a prepared statement. “Nuclear power helps to meet Gov. Charlie Crist’s goals for reducing emissions and diversifying our fuel sources.”
The article accepts comments, so I put in my $2 worth. While looking through the thread of what other readers have said, I noticed one that is quite unusual and quite important. The context of the comment was the predictable comment from a reader who said something to the effect that Florida is the Sunshine State, it should be doing more to develop solar power instead of building new nuclear plants. With apologies to any copyright that H. Diaz might have desired, I am going to take a risk and quote the entire comment here.
My house uses solar panels for the water heater. I have been told it saves me about $15 per person per month. The equipment came with the house and it would cost at least $2,500 to replace it today. With the savings it produces it would take me 7 years to pay off this so called investment. Also, it only produces enough hot water for two people. Every time we have visitors staying over we have to turn on the electrical heater. Better and more powerful panels will cost much much more. It is ok for the government to subsidize research and development of alternative sources of energy, however, the finished product has to be able to be competitive with other traditional sources of energy. At this point solar power is not. Keep in mind we can always end up with wonderful things like ethanol which today is causing enormous environmental degradation as a result of increase agriculture and it is producing and increase in food prices we have not seen in decades. The ‘yellow’ fuel actually has the potential to create world wide famine. They already are having riots in Mexico because the price of tortillas has sky rockets. So lets be careful about the unintended consequences of things done out of emotion, not reason.
Posted by: H. Diaz10/17/2007 7:04 AM
I encourage you to visit and see just how many of the comments express similar thoughts and concerns about suggested alternatives to nuclear power. Heck, I might even have to move back to the state upon retirement!
Note: My apologies to the company described above as FPL. Apparently Blogger does not like the ampersand symbol and refused to allow me to post this without removing it.
