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Tug Of War Erupts Over Electricity Recovery Fee

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By Carl  Orth | The Suncoast News

Published: December 24, 2008

NEW PORT RICHEY - An electric rate increase of nearly 25 percent could be like the proverbial lump of coal left in the Christmas stockings of Progress Energy customers, some lawmakers argue.

Some legislators vow to seek a rollback next year of not quite half of the rate hike because residents are hurting from the recession.

Yet Progress Energy executives insist they need the funds as they prepare for nuclear power projects, which can take the better part of a decade to bring on line.

Gov. Charlie Crist, however, last week praised the utility for its plan for Crystal River nuclear plant upgrades. Cleaner power sources can decrease dependence on fossil fuels, which cause more pollution, Crist reasons.

Alternative power projects can create "green jobs" as well, the governor said in the press release.

Officials are at odds about the advance nuclear power recovery fee, which is a bit more than 11 percent of the 25 percent rate hike going into effect in January for Progress Energy.

Nobody is challenging at this time the 13 percent part of the rate hike for higher fuel costs, especially coal.

Leading the charge for a rollback of part of the rate hike are state Sen. Mike Fasano, R-New Port Richey, and state Rep. Peter Nehr, R-Tarpon Springs.

"People seem to like that," Greg Giordano, chief legislative assistant to Fasano, said about calls on a possible rate rollback. "They're very happy about that."

Customers will have to go ahead and pay the entire 25 percent rate hike after Jan. 1 until legislation is introduced, Greg Giordano said.

The bill probably will have to wait until the regular 2009 session of the Legislature, which starts in March, Giordano said.

The special session in January is narrowly focused on cutting the state budget.

A rate rollback bill, if it passes, however, would be retroactive to Jan. 1, Giordano emphasized.

Progress Energy would have to refund part of the rate hike to its customers in that situation.

The bill probably would suspend the 11 percent nuclear power recovery fee for Progress Energy for up to 2 years, Giordano said.

Alternate sources of funds for nuclear power could then be researched.

Fasano has suggested Progress Energy turn to its investors or perhaps explore bond issues.

In fact, Fasano is scheduled to meet Jan. 7 with Public Service Commission Commissioner Nancy Argenziano, a former legislative colleague, about customers paying some of the nuclear power preconstruction costs.

One question lingers - would Gov. Crist veto a rate rollback bill even if it passes the Florida Legislature?

"I would never speak for the governor," Giordano said.

"The governor looks forward to working with Sen. Fasano and other members of the Florida Legislator to reduce electric rates for Floridians," a Crist spokesman, Sterling Ivey, wrote in a Dec. 18 e-mail message responding to a request for comment.

On the same day, though, the governor's office had put out a statement praising Progress Energy's initiatives toward cleaner power sources with the Crystal River plant upgrades.

"I am pleased that Florida companies like Progress Energy Florida are moving our state forward on the path to energy diversity and independence, as well as reducing greenhouse-gas emissions," the Crist statement reads in part.

"Florida is truly seeing the 'gold in green.' We are thankful for projects that are furthering economic development and creating "green jobs" here in the Sunshine State. I applaud Progress Energy Florida for leading by example to use fewer fossil fuels, improve our air quality and protect our environment."

The utility also earned praise from Michael W. Sole, secretary of Florida Department of Environmental Protection.

"By replacing its two oldest coal-fired units at the Crystal River Energy complex with a new, advanced nuclear plant in Levy County, we will see a reduction in emissions equivalent to removing more than 830,000 vehicles from Florida's roads," Sole wrote in his Dec. 18 statement.

The utility is working toward implementing new air emission-reduction technology at its other two coal-fired units, Sole said.

Those steps respectively will reduce sulfur dioxide and nitrogen oxides emissions by 90 percent and mercury emissions by 80 percent, even in the absence of federal regulations mandating it to do so.

"By combining the ethic of good stewardship and the spirit of innovation, we will continue to improve the quality of our air and reduce our greenhouse gas emissions," Sole said.

Carl Orth can be reached at 727-815-1068 or corth@suncoastnews.com.

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