Probe: FPL gave regulators old data
Customers may be overpaying for nuclear projects
That's the conclusion of a report from Concentric Energy Advisors, of Marlborough, Mass., the company FPL hired to look into an employee complaint about the issue.
The result, say some utility critics, may be that FPL customers are paying more for nuclear planning than regulators would have allowed had they been given the latest information.
Regulators approved charging customers $63 million this year for planning the proposed nuclear projects. PSC hearings start Tuesday on FPL's proposal to charge customers for $31 million for nuclear projects next year.
Concentric investigated allegations of old data in a signed letter sent in February to Lew Hay, president of FPL's parent company, NextEra Energy. About the same time, three anonymous letters were sent to FPL management and newspapers alleging FPL managers doctored data sent to regulators to support FPL rate requests.
"Most of the factual assertions in raised in the [signed] letter were shown to be accurate," Concentric wrote in a 23-page report obtained by the Sun Sentinel.
FPL spokesman Mark Bubriski said the utility does not agree with parts of the Concentric report. He said FPL did not share the newest information - about higher nuclear nuclear costs - with regulators last year because senior managers felt the information might change. At the same time, there was a shake up in the management of the nuclear expansions and the company was considering redoing the cost estimates.
For the past six months, the Florida Department of Law Enforcement has been reviewing the anonymous letters. The review continues but hasn't been upgraded to an official probe, according to an agency spokeswoman. NextEra has said its internal and external investigations found no evidence to support the anonymous allegations, made by people who identified themselves only as FPL employees.
The nuclear projects are FPL's proposed expansion of four nuclear generators, including two at the Turkey Point plant near Miami and two in St. Lucie County. FPL estimated the projects would cost about $1.8 billion in 2007, but they are now estimated to cost up to $2.3 billion. FPL was asked for updates on costs at hearings last year and knew about part of the increase then, according to Concentric.
"Certain information provided by FPL in the 2009 [nuclear cost hearing] was out-of-date and did not represent the best information available at that time," Concentric wrote after a two-month inquiry. "We believe that the $300 million, or 27 percent, increase of the projected cost of the...project should have been discussed in the live testimony."
The report goes on to say FPL has taken steps to address the concerns such as including a regulatory affairs executive in meetings about updated costs. The report also found the utility's spending on the projects to be prudent so far.
Sara Barczak, a program director for the Southern Alliance for Clean Energy, an opponent of FPL's nuclear projects, called the lack of disclosure "problematic," especially because the utility employees were speaking under oath at hearings. "Perhaps it could have happened that the PSC could have voted differently last year," she said. "I'm just glad the information came out with the hearings starting this week."
Bubriski said that customers only pay in advance for planning costs for nuclear projects, not construction costs, so the higher project cost estimates would likely have not affected the PSC's decision last year.
Commissioner Nathan Skop on Friday grilled FPL about "basically misrepresenting a material fact before the commission." Last week's meeting was to determine whether the utility could keep some documents confidential during this week's nuclear cost hearings.
The FPL employee who wrote the signed letter said he received a negative evaluation in 2009 for the first time in his 30-year career. He indicated he's concerned about possible retaliation for sticking to the higher nuclear cost estimate. "My team delivered the correct message to Sr. Management. Sr. Management did not want to accept the message," he wrote in the letter to Hay.
The hearing how much customers will have to pay next year for FPL's four nuclear expansion projects and two additional proposed nuclear reactors at Turkey Point starts at 9:30 a.m. Tuesday and can be viewed live online at http://floridapsc.com/agendas/audiovideo
Julie Patel can be reached at email@example.com and 954-356-4667.