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NextEra sues Nuclear Energy Institute for 'extortion' amid fallout over policy

SNL Image

NextEra's Turkey Point nuclear plant outside of Miami, Fla., in 2008.

Source: AP Photos / Wilfredo Lee

NextEra Energy Inc. has accused the Nuclear Energy Institute of extortion in a lawsuit over the revoking of access to an electronic screening database for nuclear workers until the former institute member pays $860,000. The lawsuit blamed NextEra's split with the Nuclear Energy Institute, or NEI, on the national trade group's support for the U.S. Department of Energy's grid resilience proposal and other "irrational and unreasonable policies that would distort electric energy markets."

Several NextEra subsidiaries, including Florida Power & Light Co., filed the lawsuit on Feb. 2 with the U.S. District Court for the Southern District of Florida, accusing NEI of breach of contract by denying the companies access to the personnel access data system, or PADS, which pools industry information to vet workers at commercial nuclear power plants across the U.S. Losing access to PADS, NextEra said, means that conducting background checks and clearing prospective plant workers will take far longer.

"NEI is attempting to retaliate against NextEra for its decision by trying to squeeze NextEra and its customers by making a desperate grab for cash," said NextEra spokesman Peter Robbins in a statement. "NEI is demanding that NextEra rejoin NEI and pay full membership fees in order to access PADS, a program that NextEra already owns."

According to the complaint, NEI rejected NextEra's requests to retain access to PADS and returned subscription payments after NextEra canceled its dues-paying NEI membership for the upcoming year on Jan. 4. Then on Jan. 30, NEI informed NextEra that its access to PADS was being terminated, effective Feb. 4, unless a "membership fee" is paid. NextEra said the five-day termination notice breached a required minimum notice of three months under the PADS agreement.

Nuclear sunset

Nuclear plant owner Entergy Corp. also canceled its NEI membership without explanation at the same time as NextEra. When asked if Entergy is in a similar bind, Entergy spokeswoman Emily Parenteau said in a statement that Entergy has a system in place that replaces PADS. The loss of two of the largest U.S. producers of nuclear power comes as the industry faces increasing retirements of uneconomic plants in competitive wholesale markets awash with cheap natural gas supplies. Stagnant consumer demand for electricity and continued growth of subsidized renewables have also cut into revenues of merchant nuclear plants.

At the heart of NextEra's fallout with NEI is a disagreement over the trade group's support for the DOE proposal that sought to compensate economically at-risk nuclear and coal plants for 90 days of "secured fuel" supplies. The Federal Energy Regulatory Commission rejected that proposal on Jan. 8. NEI also champions state-level "zero-emissions credit" initiatives that compensate nuclear plants for their clean air attributes. NextEra derided NEI-funded studies supporting its positions that called into question the reliability and costs of the electric system by "attempting to create a false sense of panic and unfairly and incorrectly maligning the operations of its members," including NextEra.

"NEI claims that the 'grid-based electricity supply portfolio in the United States is becoming less cost-effective, less reliable and less resilient.' Such a thesis is unfounded," asserted NextEra. "In fact, the policies that NEI is advocating would produce those very results by introducing artificial constraints on the way in which an electric system is planned and operated."

NextEra, a long-time member of the NEI, owns about 6,500 MW of nuclear capacity, but that accounts for only about 13% of its fleet, which is dominated by renewables and natural gas capacity.

In a statement, NEI President and CEO Maria Korsnick vehemently denied NextEra's "inflammatory" allegations and said NEI will "vigorously defend" itself in court.

"When NextEra voluntarily chose to discontinue its NEI membership, it was no longer entitled to continue participating in PADS," countered Korsnick. "Even then, NEI conveyed to NextEra that it would supply the information in PADS necessary to maintain strict compliance with the NRC regulations."

As for policy disagreements, Korsnick defended NEI support for the DOE proposal. "NextEra may not have agreed with NEI’s effort to support the continued operation of existing plants, but our work was guided by the interests of our member companies," said Korsnick.