Dive Brief:

• The Florida House of Representatives on Wednesday unanimously approved a bill aimed at reforming the state Public Service Commission and utility billing practices, the Palm Beach Post reports.
• If approved by the Senate and signed into law, HB 7109 would limit future PSC members to three consecutive four-year terms, require annual ethics training for commissioners, require utilities to notify customers of the best available rates, and prevent utilities from using extended billing cycles to increase rates as Duke Energy Florida inadvertently did in 2013-2014.
• The bill will also allow Duke to securitize the $1.4 billion in repair costs for its decommissioned Crystal River nuclear plant. The facility was shuttered in 2013 but did generate electricity after 2009.

Dive Insight:

The Nuclear Asset Recovery Bonds will allow Duke to cut interest costs on plant decommissioning from the current 7% to 2.6%, decreasing the 20-year overall cost to customers by about $600 million. That would lower a 1,000 kWh-per-month residential customer’s bill by about $2.42 a month.

The initial House legislation proposed eliminating utilities’ ability to bill in advance for nuclear plant construction and a ban on utilities partnering in natural gas exploration at ratepayer expense. It also included contentious, Democrat-proposed amendments to move PSC meetings to affected customers’ communities, limit commissioners’ terms to two years, and change commissioners from appointed to elected officials.

The bond plan is a compromise on nuclear plant cost allocation. Through an advanced nuclear cost recovery plan, Duke charged customers $3.2 billion for a different nuclear plant that wasn’t built but only returned $54 million. Using securitization for this facility to lower customers’ bills assuages consumer advocates without causing the utility significant further financial pain.

The PSC recently approved a Florida Power and Light plan to recover $191 million from customers for exploratory fracking for natural gas in Oklahoma and is considering an FPL investment of $750 million per year in similar ventures.

The bill's Senate companion, SB 288, is currently under consideration by the Communications, Energy, and Public Utilities Committee.