Lawsuit challenges Florida utilities' $2B nuclear cost fees

AP News
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Posted: Feb 23, 2016 5:36 PM

MIAMI (AP) — A federal lawsuit has been filed challenging $2 billion in fees charged by Florida's two largest electric utilities for nuclear plant projects, some of which were never completed.

The proposed class-action lawsuit filed Monday seeks to stop the fees and recover unspecified damages for about 6.4 million customers of Florida Power & Light and Duke Energy. The fees were imposed on ratepayers under a law passed in 2006 by the Legislature and implemented by the state Public Service Commission.

The suit contends that the law violates the U.S. Constitution's commerce clause by discriminating against other out-of-state energy producers and that it is pre-empted by federal energy and nuclear laws. It also claims Florida customers are improperly charged for nuclear projects that can be subject to huge cost overruns or that are never built.

One example cited in the lawsuit is Duke's plan to build two new reactors in Levy County, which enabled the utility to begin collecting recovery fees in 2008. Even though the project was abandoned in 2013, Duke can keep all the fees it has collected plus other amounts deemed prudent by state regulators.

"These two utilities have racked up huge expenses with nuclear power plant projects — some of which they completely abandoned — and have left ratepayers holding the bag," said attorney Steve Berman, managing partner at Seattle-based Hagens Berman, which filed the lawsuit in South Florida federal court.

Berman's firm and the nonprofit Institute for Southern Studies say other states, including Georgia and Louisiana, have laws similar to that in Florida allowing utilities to collect such fees.

Duke, based in Charlotte, North Carolina, said in a statement Tuesday that the lawsuit should be dismissed and noted the Florida law has been unsuccessfully challenged in four previous state court cases.

"Duke Energy is evaluating this lawsuit and will respond based on the facts and applicable law," the statement said.

Juno Beach, Florida-based FPL said in a statement that the lawsuit is "frivolous" and that the company has not recovered any money under the law that was not authorized. FPL also said one project was completed and is operational and the other, at its Turkey Point plant south of Miami, is in the licensing process.

"It's exactly this type of politically motivated litigation that will ultimately cost our taxpayers and our customers, and put a heavy burden on state government," FPL spokesman Greg Brostowicz said in an email.

According to state records, Duke Energy has collected more than $1.2 billion in nuclear cost recovery fees since 2008. For FPL, the total tops $814 million.

If the lawsuit is certified as a class action, it could eventually repay millions of Florida customers of the two utilities a portion of the fees they have been charged under the law. The lawsuit also asks U.S. District Judge William Dimitrouleas of Fort Lauderdale to halt further collection of the fees by declaring the law unconstitutional.

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