Gulf Power fuel costs down, Nuclear plant issue unresolved

State regulators approved a plan by Gulf Power Co. to take advantage of low fuel costs and trim customers’ monthly electric bills — but did not resolve a controversy about a potential Gulf nuclear power-plant site in Escambia County.

With no discussion, the Florida Public Service Commission unanimously agreed to reduce the fuel costs that are passed along to Gulf customers. Gulf and other utilities have enjoyed relatively low prices for natural gas, which fuels many power plants.

The change will be noticeable for customers of Pensacola-based Gulf, as fuel costs make up a major portion of monthly bills: Residential customers who use 1,000 kilowatt hours of electricity will see their bills drop from $126.53 to $116.61.

“Our commission’s authority to adjust rates to reflect fuel cost savings protects customers, especially heading into the summer months when electricity use often increases to keep homes cool,” PSC Chairman Ronald Brisé said.

But regulators decided to delay a decision on a separate proposal from Gulf to allow it to collect money from customers related to a $27 million land purchase for a potential nuclear power plant. The PSC earlier this year rejected a Gulf proposal to build site costs into base electric rates, but Gulf is trying to convince regulators to reverse that decision.

Attorneys for consumers and business groups are fighting Gulf on the issue, with Joe McGlothlin, an attorney with the state Office of Public Counsel, telling the PSC on Tuesday that “you’ve heard it before.”

“An analysis of facts demonstrates Gulf Power doesn’t need the north Escambia site,” said McGlothlin, whose office represents consumers in utility issues.

But Gulf attorney Jeffrey Stone said the site is important to the utility because it could house a nuclear or other type of plant, is in the western part of Gulf’s service area and has good access to transportation.

“It’s the only property Gulf has that is suitable for all forms of future generation,” Stone said.

The proposal would have a small effect on customers’ bills — it would allow Gulf to collect slightly more than $2 million from customers in 2012, according to a company filing. By comparison, the PSC earlier this year approved an overall base rate increase of $64.1 million.

Commissioner Art Graham expressed concerns about not allowing Gulf to collect money for the site. Graham said it is difficult to try to find land for nuclear-power plants, particularly if they are near residential areas, and he doesn’t “want to see this opportunity go by the wayside.”

“Residential intrusion is something you want to avoid at all costs,” Graham said.
But Graham, McGlothlin and PSC staff also pointed to questions about another undeveloped site that Gulf has long owned in Caryville. Graham said he is concerned about adding the Escambia County site to the rate base in addition to the Caryville site.

The commission decided to put off a decision on the proposal until July 17 to allow more time to review some of the key issues.

Reposted with permission from The News Service of Florida

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