Proving the need for new infrastructure construction for energy purchases has become more complicated for utilities. State commissions reserve the right to revisit rate-base investments after the...
Letters to the Editor
New Day for Prudence
I am sending this letter at the request of Robert Gruber, who is the executive director of the Public Staff-North Carolina Utilities Commission (NCUC), which is the state agency charged with representing the public in matters before the NCUC. In the article, “New Day for Prudence ,” (by Kris R. Nielson, Patricia Galloway and Charles Whitney, December 2009) the authors state (p. 49) that, in North Carolina, “the Office of Public Counsel filed testimony creating even more uncertainty as to how prudence reviews of costs not yet incurred would be handled.” The group that filed the quoted testimony is not “the Office of Public Counsel.” It consists of a number of non-profits and associations that banded together and called themselves the Public Advocacy Groups for the purpose of intervening before the NCUC. This group includes the following: the North Carolina Waste Awareness and Reduction Network (NC Warn), Public Citizen, the NC Public Interest Research Group, the Nuclear Information and Resource Service, Common Sense at the Nuclear Crossroads, Clean Water for North Carolina, and the Blue Ridge Environmental Defense League. (In at least one response, Duke called these parties the “Anti-Nuclear Groups.”)
North Carolina has no Office of Public Counsel. Because the Public Staff-NCUC is the state agency charged with representing the public in matters before the NCUC, we’re concerned that the authors’ erroneous labeling of this group will be interpreted to mean that a state agency (specifically the Public Staff) took the quoted position.
We’re also concerned because the article’s description of the NCUC’s ruling is erroneous. The Commission explicitly did not hold that “it was reasonable and prudent for a utility to proceed with the construction of the Lee nuclear units,” as the article states on page 50. The order explicitly states that the approval of the utility’s current decision generally to incur project development costs does not constitute a finding that additional base load capacity is needed, nor a finding that the nuclear plant in question should be built. (See conclusion of law number 3 from the order, below.) The commission was ruling pursuant to a new statute that specifically states that a utility may request, at any time prior to filing an application for a certificate to construct a potential nuclear generating facility to serve North Carolina retail customers, that the commission review the utility’s decision to incur project development costs. The commission held that the utility “had met its burden by demonstrating that its decision … to incur project development costs so that the proposed Lee Nuclear Station can be maintained as a potential resource option … is reasonable and prudent.” Both the statute and the order are explicit that such a ruling does not constitute any findings with respect to whether the utility may engage in any specific activities or incur any specific amount of costs.
At an earlier oral argument related to the incurrence of project development costs, a discussion occurred as to what effect a commission ruling with respect to prudence would have. Such a ruling was described as a