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PSC defers decision on nuclear cost recovery

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By PAT FAHERTY

Special to the Citizen

While Duke Energy successfully got the Public Service Commission to defer a decision on nuclear cost recovery for Crystal River and the Levy County projects to 2014, rate hikes will kick in as scheduled.

Even though the Crystal River area nuclear plant, known as CR3, has been offline since 2009 and is now retired, Duke customers will continue to pay for a planned $617 million attempt to increase the plant’s power output.

Monday, the PSC agreed to Duke’s request to delay a determination on the company’s request to recover about $175 million from ratepayers in 2014. About $106 million relates to the Levy County nuclear plant — which, last week, Duke said it will not construct — and about $69 million is for CR3.

Customers already pay for those projects. Starting in January, the slice for CR3 costs will increase by 89 cents per month for an average bill; customers currently pay about $3.45 a month for costs associated with CR3.

Duke will recover approximately $265 million over seven years.

Commissioner Eduardo Balbis raised a concern that Duke is recovering an increased rate prior to PSC approval.

“I am having a hard time with the 89 cent increase,” he said. “In this case, we are raising rates without a bit of evidence in the record.”

Duke attorney John T. Burnett said the increase would be refunded to customers, with interest, if the commission does not approve it. Conversely, if the money is not collected and the PSC supports Duke’s position, customers would have to make up the difference with interest.

“Through a complex series of discussions, we came to a resolution that resolves our concerns,” said Charles Rehwinkel, Office of Public Counsel (OPC). “The amount that is for recovery is the amount the company proposed — based on recovery amortizing the costs over a seven-year period.

“It results in an increase from last year just because of the way the math works.”

Balbis also raised an issue about the Levy plant, saying previous testimony supported its long-term feasibility. Burnett said that testimony was no longer valid.

Duke requested delaying the nuclear cost recovery hearing due to the pending settlement agreement, which cancels the proposed $24.2 billion Levy nuclear plant and paves the way for Duke to recover any costs incurred for a new natural gas plant.

Developed with the OPC and other parties to the process, the revisions to the 2012 settlement agreement also has provisions for recovering CR3, costs, the futures of CR1 and CR2 coal units and replacement fuel costs.

Contact Pat Faherty at 352-564-2924 or pfaherty@chronicleonline.com.