State regulators order Duke to refund $54 million related to failed nuclear plant

Amid a growing political backlash, state regulators on Thursday ordered one of Florida's largest power companies to give back $54 million it collected from ratepayers to pay for a failed nuclear plant.

The vote by the Florida Public Service Commission, which is coming just weeks before Election Day, is a bit of surprise since it went against the recommendations of the commission staff.

"We recognize that rate payers are frustrated and that is a reality," said PSC member Ronald Brise. "Our duty I believe is to find a way to address the issues that are frustrating the consumers but do it in a way that reflects our current statutory framework."

The decision means that sometime next year that Duke Energy Florida will wipe out an average $3.45 a month charge that customers are paying for costs associated with a now-scuttled nuclear plant. Duke announced last year it was abandoning plans to build the plant in Levy County on Florida's Gulf coast, but consumers are still paying for costs associated with the plant.

Duke Energy Florida has roughly 1.7 million customers.

Duke has already paid $54 million for equipment that was supposed to be used for the Levy plant but never received it. The company is now suing the vendor responsible and Duke officials wanted to wait until the lawsuit was resolved before crediting customers.

The PSC vote to credit customers comes at the same time that treatment of the company has become an issue in the governor's race. A group launched by a California billionaire environmentalist has taken out ads attacking Gov. Rick Scott over Duke Energy.

Republican legislators, meanwhile, have also complained about Duke and some of its billing practices. Attorney General Pam Bondi, who has spent nearly four years sidestepping utility cases, this week called on the PSC to return the $54 million to ratepayers.

"Duke Energy customers have been left on the hook for a project that never came to fruition, and I applaud the Public Service Commission for doing the right thing by requiring Duke Energy to provide credits rightfully due to its customers now rather than making them wait," Bondi said in a statement.

A spokeswoman for Duke said the charge would disappear off the bills sometime next year, but said company officials were unsure about the timing.

Before ordering the credit, the PSC on Thursday also approved overall nuclear fee rates from both Duke customers and customers of Florida Power & Light. FPL's charges are projected to drop to 15 cents a month in 2015. Duke's charge will drop about 11 cents to $5.51 a month in January as well. The $3.45 charge associated with Levy is part of that overall total and is expected to be removed by mid-year.

The Republican-controlled Florida Legislature back in 2006 passed a law that gave utilities the ability to collect money up front for nuclear power projects as a way to encourage the possible growth of nuclear power in the state.

Progress Energy, which has since merged with Duke Energy, started collecting money from customers to pay for repairs to its existing Crystal River plant as well as pay for the start-up costs associated with the Levy plant. But Charlotte, N.C.-based Duke decided last February to permanently close the Crystal River nuclear plant after repairs did not go as planned. Workers cracked a concrete containment wall in 2009 and an attempt to fix the problem in 2011 resulted in more cracks.

In 2013, Duke officials announced they were abandoning the Levy County plant due to changes in the energy market and regulatory hurdles at the state and federal level.