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Questions arise about refund of nuclear fee on power bills

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Published:   |   Updated: August 7, 2013 at 10:23 AM

NEW PORT RICHEY - Duke Energy pulled the plug on its proposed Levy County nuclear power plant Thursday, leaving customers in the dark about possible refunds for the monthly fee the company charges for nuclear projects.

In response, area state lawmakers are urging customers to contact the Florida Public Service Commission with opinions about refunds. Judy Parker, legislative assistant for state Sen. Wilton Simpson, R-Trilby, was referring constituents to the toll-free PSC number (800) 342-3552.

All eyes now turn to the five member PSC, which must rule on Duke Energy's amended plan. PSC officials did not yet have a response Friday.

The regulators in November approved an extra $142 million for the Crystal River and Levy County nuclear power plants, raising the monthly fee by $1.93. At the moment, the total fee amounts to about $5 a month for the average customer.

Duke Energy decided in February it would close the 36-year-old Crystal River 3 nuclear unit rather than continue with increasingly costly repairs. The nuclear unit in Citrus County, which Duke Energy acquired when it merged with Progress Energy in July 2012, has been in the shut-down mode since September 2009.

In 2006, the Legislature passed a law allowing utilities to charge a monthly fee for preconstruction expenses since nuclear plants take so long to get approval and to build. Lawmakers were trying to encourage alternatives to electricity-generating plants powered by carbon-based fuels.

The Levy County facility, however, which Progress Energy announced in 2006, has experienced numerous delays. The delays have pushed back the projected opening of the first of its planned two units to 2024.

Initially, Progress Energy expected to have the Levy plant in operation by 2016. Progress Energy originally estimated the plant would cost $5 billion but the most recent projection was $19 million to $24 million.

Meanwhile, improvements in drilling techniques have sparked a boom in the production of relatively clean-burning and inexpensive natural gas.

State lawmakers could consider legislation in 2014 to force refunds if any PSC ruling on the end of the Levy County project isn't to their liking.

Changes enacted this year could end collection of the nuclear fee if the plant is not built. State Sen. John Legg, R-Lutz, sponsored the law, which went into effect July 1.

Legg, a member of the Senate Regulated Industries Committee, sent a letter last week to PSC Chairman Ronald Brisť in which the lawmaker said he believes the legislation should apply to the Levy County plant.

State Rep. Mike Fasano, R-New Port Richey wants an "immediate refund" of all advance nuclear recovery fees related to the Levy County project, his chief legislative assistant, Greg Giordano, said Friday.

"Rep. Fasano has said many times in the past they never intended to build it anyway," Giordano said about the Levy County facility.

Fasano, who on Tuesday was named Pasco tax collector by Gov. Rick Scott, believes the shareholders of investor-owned electric utilities should bear development expenses. Company officials have countered that the "pay-as-you-go approach" was like paying off a credit card balance each month.

"The law that's in place that we're using still provides for us to collect for expenditures that we have made," Duke Energy spokesman Sterling Ivey said Friday.

"We certainly hope so," Ivey said about the PSC rendering a decision before the end of the year.

"I expect will get a lot more comments from customers during the next week," Ivey said about reactions to the shelving of the Levy County plant plans.

An Aug. 1 Duke Energy press release says the North Carolina-based utility will "extend its current general base rate freeze for an additional two years through the end of 2018 as long as the company's return on equity does not drop below 9.5 percent."

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