TALLAHASSEE, Fla. (AP) — The Florida Supreme Court on Thursday unanimously upheld a state law that allows utilities to charge customers for future nuclear reactors — even if they never get built.
Lawmakers on the same day passed a bill that, among other things, requires a review and approval before a utility can qualify for such cost recovery.
Southern Alliance for Clean Energy had appealed a final order of the Public Service Commission allowing Florida Power & Light Company and Progress Energy Florida to charge customers for nuclear power plants that may never be built.
The alliance, an environmental advocacy group, asked the justices to declare the law an unconstitutional delegation of authority from the Legislature to the commission, which regulates the state's utilities.
The court ruled that the law wasn't unconstitutional and the commission's order wasn't arbitrary or unsupported by evidence.
"In so doing, we stress that it is not this court's function to substitute its judgment for that of the Legislature," the opinion said. Allowing utilities to charge for plants that may never be built "is a policy decision for the Legislature, not this court."
As if on cue, senators on Thursday voted unanimously on a bill that tweaks the law in question, though the House previously removed a section that would have required refunds if utilities didn't follow through on plans to build nuclear power plants.
The bill (SB 1472) now goes to Gov. Rick Scott.
Sen. Jack Latvala, a Clearwater Republican, said he regretted that the refund provision was deleted from the bill, but "we have still made a significant step forward for the consumers of Florida."
The bill headed to Scott also requires state regulators to sign off on the preconstruction charges again after the utility reaches certain stages in the licensing and construction of the plant.
The commission order in the court case allowed Florida's two largest electric utilities to charge customers $282 million for upgrading existing nuclear plants or building new ones. Progress is now a subsidiary of North Carolina-based Duke Energy.
Expenses normally cannot be passed on to customers until power plants go into service, but the Legislature made an exception for nuclear reactors in the 2006 law. It was designed to encourage the expansion of nuclear energy.
The law lets commission members decide whether passing on the nuclear costs to customers is prudent and reasonable, but the alliance argued the standards leave regulators with "unbridled discretion."
Its lawyer had argued that utilities have been unwilling to spend their own money on nuclear projects, some of which have been plagued by cost overruns and delays.
Latvala said the stricken refund provision in the bill would have ensured that utilities couldn't profit from a "bad decision" to drop a planned nuclear power plant project.
"The House saw fit to take that out of the bill over there, softened that up a little bit and I regret that," he said.
The Supreme Court case is Southern Alliance for Clean Energy v. Graham, No. SC11-2465.