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Fla. PSC staff wants feasibility study of FPL's Turkey Point project


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Fla. PSC staff wants feasibility study of FPL's Turkey Point project

SNL Image

The containment buildings of the Turkey Point nuclear plant in Miami-Dade County, Fla.

Source: Associated Press

Florida Public Service Commission staffers say it is too early for regulators to rule whether Florida Power & Light Co. should continue pursuing a federal permit for its Turkey Point nuclear plant expansion.

Florida Power & Light has asked the PSC to determine the reasonableness of its efforts to acquire a combined operating license, or COL, from the U.S. Nuclear Regulatory Commission. The utility seeks the COL despite putting a self-described "pause" on work at Turkey Point, and not filing feasibility studies in 2016 and 2017 on the time and cost required to build two new reactors.

In an Oct. 5 recommendation to commissioners, staffers said it is "premature" for the state agency to consider the COL issue, as they want the PSC to have current feasibility figures for any future vote. FPL "has not complied" with a state law requiring that annual analysis, staff said, and if the NextEra Energy Inc. subsidiary wants Turkey Point to be eligible for cost recovery, the utility would need to file the study every year.

Staff's comments reflected concerns raised by stakeholders who attended an August PSC meeting on Turkey Point, many of whom said the pause and lack of feasibility analysis would drag out the project timeline and increase what they see as speculative risk. FPL has said units 6 and 7 could go online in 2031 and 2032, respectively, and that the total, all-inclusive cost could be as high as $21.87 billion.

That price tag is reminiscent of the V.C. Summer expansion, stakeholders argued, which was abandoned by two South Carolina utilities after they revealed the total cost would be at least $25 billion. The aftermath of the Summer abandonment decision has seen tense legislative hearings, state and federal criminal investigations, shareholder and customer lawsuits, and rating agency and stock downgrades.

FPL has also sought to defer cost recovery for the Turkey Point expansion, asserting it does not need to collect customer surcharges while the pause is in effect. The point of the pause, FPL contends, is so the utility can see how the situations at the Summer and Alvin W. Vogtle plants play out before it moves forward with a petition to do preconstruction work. The Summer, Vogtle and Turkey Point expansions have all used the bankrupt Westinghouse Electric Co. LLC's AP1000 reactor design. Westinghouse is a subsidiary of Toshiba Corp.

The commission staff recommended the PSC reject this request because FPL has not filed a feasibility analysis since 2015. Deferred costs should not be eligible for future recovery in the nuclear docket, staff added, but those expenses could be eligible via traditional ratemaking.

If FPL does intend to pause its participation in nuclear cost recovery proceedings, staff said, the utility should file annual budget and cost updates at Turkey Point and explain what is causing or expected to cause project costs to change.

Another staff recommendation was that commissioners find FPL's 2015-2016 Turkey Point expenses of $47 million to be prudently incurred, and thus eligible for recovery. Staff also recommended approval of an over-recovery of $7.3 million as the utility's true-up amount at the site.

While staff said commissioners should formally sign off on FPL's nonbinding estimated cost range of $14.96 billion to $21.87 billion for the Turkey Point project and that the reactors' nonbinding assumed commercial operation dates are 2031 and 2032, stakeholders insisted those figures are pricier and longer than FPL lets on, or are simply unknown.

The PSC is expected to vote on staff's recommendations at an Oct. 17 commission conference, and the U.S. Nuclear Regulatory Commission is scheduled to hold a Dec. 12 hearing on FPL's COL application.