With soaring costs, nuclear on the ropes in state legislatures
The rising cost of construction of nuclear power plants, combined with the allure of cheap gas, has lawmakers in Georgia and Florida asking why ratepayers should be on the hook for expensive, over-budget, past-due projects, the Associated Press reports.
In Georgia, a coalition of tea party conservatives and consumer advocates have banded together in support of a proposal to cut into Southern Co. (NYSE: SO) profits to penalize the regulated monopoly for going over budget. “Conservatives do not believe in incentivizing failure,” a tea party activist recently told lawmakers, according to the AP. Currently Georgia Power, a subsidiary of Southern Co., earns about 11 percent in profits when investing its own money in power projects, reports the AP.
Reacting to the recent closure of the Crystal River nuclear plant, Florida lawmakers are considering proposals to prevent utilities from collecting consumer fees before electricity is ever produced on a project. “A lot of people are paying for something that they’ll never see any return on their money,” said a Republican legislator behind one proposal, according to the AP. A similar Democratic proposal is on the table as well.
Plant owner Duke Energy (NYSE: DUK) stands to earn up to $50 million in profits on the $500 million collected from customers to pay for upgrades that ended up causing still greater damage to the facility and leading to its closure. Changes in the fee collection law could affect construction of the proposed Levy County nuclear plant, for which ratepayers have already paid $1.5 billion. Under current law, Duke could earn up to $150 million in profit even if the project is never completed.