WFSU News Team
Tue June 19, 2012
PSC Gives Gulf Power Proposal a Second Look
The Florida Public Service Commission is considering an appeal from Gulf Power that would let the utility purchase a parcel of land and cover the carrying cost with rate increases. The commission initially denied the company’s request, but it’s taking a second look at the issue.
Gulf Power wants to buy a piece of land in Escambia County that the company says could be the future site of a potential nuclear power plant. (Though the official decision about a nuclear plant still hasn’t been made.) The move comes amid controversy about a 2006 law that allows utilities to collect money through rate increases to cover the cost of a nuclear power plant before the plant is built. The “Nuclear Cost Recovery” law, which is now being challenged in court has allowed some companies to collect money from customers for years for a nuclear plant that some now say could never be built. But, Gulf Power’s lawyer, Jeff Stone, said the law in question really doesn’t apply in this case.
“To be clear, the NuclearCost Recovery statute has nothing to do with the portions of issue 24 that we are addressing through our motion. If the Nuclear Cost Recovery statute had never been enacted we would still have issue 24 in this rate case," Stone said.
Stone said the Escambia County property in question would be suitable for all forms of future power production. Gulf wants to purchase the property and then use rate increases to cover the carrying cost, or cost the company incurs when it borrows money to buy the land. It’s kind of like interest paid on a mortgage. But Stone said he thinks discussions about a potential nuclear plant on the property colored the PSC’s decision, saying the commission denied the request because it inappropriately applied Florida’s Nuclear Development rules. But Commissioner Julie Brown says she remembers it differently
“My thinking when I supported the vote was not based on the lack of a need determination, the lack of a need determination. It was based on the fact that Carryville has been in rate base for over 30 years, it was based on the 10 years site plan, that they don’t have any generation need until 2022 for 30 megawatts and it was based on the reasonableness too and for those reasons I don’t think there’s been a mistake of fact here or mistake of law that we’ve addressed," Brown said.
Carryville is another property owned by the utility, that consumer advocates like Joe McGlothlin with the state Office of Public Counsel, said the utility is wasting.
“One of the exhibits in this case is an excerpt from its ten year site plan in which it enumerated the next likely sites for generation expansion. And even though Caryville has been part of its plan now for future use for decades, the caryville site didn’t even make the top four. Gulf listed four other sites that it presently has in inventory available for generational expansion,” McGlothlin said.
Gulf Power argues the size of the Escambia property will give the utility more flexibility and be a wise purchase for consumers in the long run. The commission tabled the discussion to give commission members the opportunity to look over transcripts from the original hearing. Meanwhile the group okayed a separate Gulf Power plan to reduce fuel charges for residential customers.