PSC Approves Progress Energy Fla. Rate Reduction

From Businessweek

By Bill Kaczor

 

State regulators cut the monthly bill for a typical Progress Energy Florida customer by $7.13 on Tuesday, but rejected a proposal from commercial users for a further reduction linked to a crippled nuclear power plant.

Most of the overall rate reduction approved by the five-member Public Service Commission for 2013 is due to the declining price of natural gas that’s burned in conventional power plants.

A smaller part is represented by $327.6 million that the St. Petersburg-based utility expects to receive from an insurer for power it will have to buy from other sources to replace the output of the damaged reactor at Crystal River. It has been out of service for the past three years since a containment wall cracked during an attempt to replace the plant’s steam generators.

Progress previously received $162 million from its $490 million replacement power insurance policy. The commercial customers, though, contend Progress should expect a second $490 million because different parts of the reactor’s containment building sustained two separate cracks in two different years.

That would have reduced the replacement power costs passed on to customers by an equal amount.

The commission, without discussion of the issue, approved a staff recommendation to reject that argument, which was made by the Florida Industrial Power Users Group, PCS Phosphate-White Springs and federal agencies served by Progress.

The staff recommendation notes that Nuclear Electric Insurance Ltd. has so far acknowledged only the first event and not made a determination on the second.

It adds that if the insurer determines the second crack is a separate event and entitled to an additional $490 million in coverage, that amount then could be used to reduce customers’ rates.

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