The Florida Public Service Commission (PSC) today approved amendments to the rule that establishes an alternative cost recovery mechanism for nuclear power plant construction projects. The rule amendments implement changes to Section 366.93, Florida Statutes, enacted by the Legislature during the 2013 session. The Florida Legislature’s statutory change retains the 2006 law’s alternative cost recovery provisions but requires additional levels of PSC review.
The alternative cost recovery mechanism, known as the Nuclear Cost Recovery Clause (NCRC), allows for the recovery of certain plant construction costs as they are incurred, rather than waiting until the plant enters commercial operation. This approach provides incentives for a utility to build nuclear power plants, by decreasing financial risk, while at the same time decreasing the total cost of the project that is ultimately passed on in customer bills.
New provisions of the law and rule limit cost recovery to only those costs related to obtaining site certification and a license from the Nuclear Regulatory Commission, until the certification or license is granted. Utilities must petition the PSC for approval before proceeding with other preconstruction work or commencing the project’s construction phase. To gain approval, the utility must show that the plant remains feasible and that projected costs are reasonable. In addition, project carrying costs (interest costs) were revised to apply the same charge that is applied to other construction projects.
PSC Chairman Ronald A. Brisé said, “The amended rule will allow a greater level of PSC review as a project proceeds from one phase to the next. In addition, revising the carrying cost rate will immediately lower costs and save customers money.”
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