Florida Official Declines to Review Costly Nuclear Power Plant

Florida Official Declines to Review Costly Nuclear Power Plant
May 16, 2013

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)

Florida Agriculture Commissioner Adam Putnam, whose agency oversees state energy policy, told Rep. Mike Fasano (R-New Port Richey) today he does not have the resources to perform an economic analysis to determine whether a proposed nuclear power plant would end up costing electricity customers more than a new natural gas facility. Putnam’s refusal to conduct the requested economic analysis stands in stark contrast to his commissioning of an economic analysis of renewable energy last spring when his proposal for $100 million in subsidies to renewable energy companies faced a gubernatorial veto.

Fasano requested Putnam perform the economic analysis after a Tampa Bay Times analysis concluded construction of a proposed Duke Energy nuclear power plant in Levy County, west of Ocala, would force electricity customers to pay twice as much for electricity than would be the case if a natural gas power plant were built.

Taking Duke Energy’s projected construction, fuel and operations costs at face value, the Times found the nuclear power plant would be substantially more expensive than a natural gas power plant. The Times estimated electricity customers would pay at least twice as much for nuclear power than natural gas power.

“What building a new nuclear power plant does really well, the analysis showed, is fatten a utility’s bottom line. Duke Energy would pocket as much as 10 times the profit from the Levy project as it would from a natural gas facility,” Times reporter Ivan Penn noted.

Putnam’s Department of Agriculture oversees state energy policy, while the Florida Public Service Commission (PSC) has authority to approve or decline particular electricity projects. Consumer groups frequently assert the PSC is in the pocket of utilities and simply rubber-stamps utility proposals without subjecting them to rigorous, objective economic analyses. Expressing a lack of trust in the PSC’s inclination to conduct a balanced economic analysis regarding the proposed Levy County nuclear power plant, Fasano asked Putnam to perform an economic analysis.

In a letter issued earlier today, Putnam told Fasano he does not have the resources to study the issue. He also claimed developing more nuclear power benefits Florida consumers.

“Your loss of confidence in the PSC’s ability to do their statutorily mandated job is a larger issue that only you and your colleagues in the Florida legislature are equipped to address,” Putnam wrote.

“As Florida’s Commissioner of Agriculture, I have consistently made clear that I believe increasing diversity in Florida’s energy sources is critical to securing a stable, reliable and affordable supply of energy for Florida consumers.”

Putnam has repeatedly asserted Florida’s electricity mix has too much inexpensive natural gas and should include a larger share of electricity from other, more expensive electricity sources. Putnam claims electricity diversity trumps electricity affordability.

Although Putnam told Fasano he does not have the resources to perform Fasano’s requested economic study, he found the resources to conduct a similar study regarding renewable energy last spring. In April 2012, Gov. Rick Scott indicated he was planning to veto legislation handing over $100 million in taxpayer subsidies to renewable energy companies.

On the morning Scott planned to issue his veto, Putnam presented a study he commissioned from a renewable energy activist on the payroll of renewable energy associations claiming the $100 million renewable energy subsidies would actually save taxpayers money. Relying on the assertions contained in the last-minute analysis, Scott withheld his veto pen and allowed the legislation to become law.

To secure Scott’s tacit approval of the renewable power subsidies, Putnam agreed to produce an annual report documenting the economic costs and benefits of the subsidies. Putnam promised to produce the first report by March of 2013, but has yet to produce it. A September 2012 study by independent energy economists found the Putnam-commissioned renewable energy study was deeply flawed and the renewable energy subsidies will cause substantial net economic harm in the state.

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)