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Public Service Commission


11/17/2015 Contact: 850-413-6482

PSC Approves Crystal River 3 Nuclear Plant Financing

TALLAHASSEE — The Florida Public Service Commission (PSC) today approved Duke Energy Florida, LLC’s (DEF) petition for a financing order, allowing DEF to issue a special type of bond—known as a “securitization bond”—to recover costs associated with the closing of Crystal River 3 (CR3). The bonds, expected to garner a top credit rating, will save customers hundreds of millions of dollars.

"The Florida legislature provided us with a unique way to lower customer costs for nuclear plant retirement, which could potentially be expensive,” said Chairman Art Graham. “With their lower interest rates, bonds will help pay for CR3’s retirement and also minimize the costs for customers.”

The bonds could reduce the customer burden by nearly $708 million, resulting in an estimated $2.93 monthly 1,000 kWh bill charge compared to $4.96 using the traditional rate base recovery method. 

DEF plans to offer the Nuclear Asset Recovery Bonds to investors via a public offering registered with the Securities and Exchange Commission, which is typical of utility securitizations. Saber Partners--the PSC’s financial advisor on this bond transaction--also assisted the Commission on the nation’s first “hurricane recovery securitization” for Florida Power & Light Company. The bonds are anticipated to be issued in the first quarter of 2016.

On July 27, DEF filed its plan with the PSC to assess customer fees for up to 20 years and sell this income stream to a “special purpose entity” that will use the fees as collateral for bonds. The nuclear asset recovery charge will be paid by all existing and future customers receiving transmission or distribution services from DEF. The funds DEF receives will be used to recover the amount of the CR3 regulatory asset.

Parties that agreed on the issues, approved by the PSC on October 14, for the final financing order include DEF, the Office of Public Counsel, Florida Industrial Power Users Group, PCS Phosphate, and the Florida Retail Federation.

DEF serves approximately 1.7 million retail customers in Florida.

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