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ER No. 4276, approved in 1988, authorized $1.8 million for
fire protection modifications to the raceway protection for
Turkey Point. This ER was revised in 1989 to decrease the amount
authorized for the expenditure to $1,081,459. Similarly, ER No.
6256, approved in 1989, authorized $10 for the raceway protection
for Turkey Point, which was revised in late 1989 to $358,000, and
revised again in early 1991 to decrease the amount authorized to
$263,722.
With respect to the installation of the raceway protection
system, petitioner incurred capitalized costs (tax basis) of
$969,676 and $239,161 for equipment placed in service in the 1989
and 1990 taxable years, respectively.
5. Spent Fuel Rack Systems
FPL’s use of nuclear fuel to generate electricity requires
it to replace one-third of the fuel assemblies every 18 months.
FPL uses spent fuel racks to store its used nuclear fuel. FPL
claims ITCs for the spent fuel rack systems in the 1988, 1989,
and 1990 taxable years.
Under the Nuclear Waste Policy Act of 1982, Pub. L. 97-425,
sec. 302, 96 Stat. 2257 (nuclear waste act), the Federal
Government was required, in exchange for fees paid by electric
utilities, to handle the disposal and permanent storage of spent
or used fuel beginning in 1998. The purpose of the nuclear waste
act was to develop repositories for disposing of high-level
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