Saying the move will save hundreds of millions of dollars for Duke Energy Florida customers, state regulators Tuesday approved a financing proposal for costs tied to the shuttered Crystal River nuclear plant.
The decision by the Florida Public Service Commission came after years of controversy about the damaged power plant, but the financing proposal drew support from Duke, consumer attorneys and business groups.
"In practical terms, getting this done will save Floridians lots and lots of money, hundreds of millions of dollars,'' said Robert Scheffel Wright, an attorney for the Florida Retail Federation, which frequently takes part in utility cases.
The approval involves $1.3 billion in costs associated with the 2013 decision by Duke to permanently shut down the Crystal River plant. The plant had not generated electricity since 2009, when a containment building was damaged during a project to replace a steam generator.
In early 2011, as the plant was getting prepared to operate again, additional cracks were discovered in different parts of the containment building. The additional cracks touched off a complicated debate about whether the utility should permanently close the plant or try to repair it.
The proposal approved Tuesday allows Duke to use a bonding process known as "securitization" to spread out the costs for customers over a 20-year period. The Public Service Commission said the move could ultimately save customers as much as $708 million over a more-traditional method of recovering costs through electric rates.
"The primary purpose here is to mitigate the costs that are passed on to customers,'' Commissioner Julie Brown said.
Lawmakers and Gov. Rick Scott this year approved a measure that cleared the way for the securitization process, similar to a 2005 law that dealt with utility expenses for hurricane restoration. In documents filed in May with the Public Service Commission, Duke officials said the money would cover a variety of expenses related to the Crystal River plant, such as construction projects and costs related to nuclear fuel and nuclear materials.
The financing proposal had the support of the state Office of Public Counsel, which represents consumers in utility cases, and major commercial electricity users.
"This is a very creative mechanism to resolving a long and protracted process,'' Brown said.