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Venture

Robert Trigaux

Psssst? Wanna buy a nuke plant?

28

January

levysitenukemap.jpg

Wake up and good morning. I'm honestly not sure what to make of this Orlando Sentinel story that says the Orlando Utilities Commission (OUC) -- the city's chief producer of electricity -- may invest in nuclear power plants built in South Carolina and, by so doing, somehow deliver electricity to Orlando residents imported from nukes proposed for a site 450 miles and two states away.

Huh? Read it for yourself here.

It seems OUC has long wanted to invest in nuke power and get away from its heavy dependence on coal and natural gas fuels to fire up its electric generators. Why? Because the nation is moving to cleaner emission rules and nukes, for all their radioactive waste, do not directly pollute the air.

"This is a great opportunity for OUC economically," OUC general manager Ken Ksionek told the Orlando newspaper. "I like the diversification, to have 100, 150, 200 megawatts coming from up there."

I won't bore you with all the details...

* like the transmission line challenges of moving South Carolina electricity to Orlando....
* like the South Carolina power companies involved ( investor-owned South Carolina Electric & Gas Co. and the South Carolina Public Service Authority, a state-owned utility commonly known as Santee Cooper) and their perhaps desperate hunt for greater fools, uh, I mean other investors to share their nuke costs...
* and like the bargain basement price tag pitched by South Carolina -- a nuke plant for just $10 billion! -- while Progress Energy Florida's proposed plant north of Tampa Bay in Levy County is at $22 billion and climbing... either South Carolina's got a Family Dollar nuke or Progress Energy's nuke is from Tiffany's but somebody's fudging on the price tag here. (The map above shows the site of the proposed Progress Energy plant in Levy County.)

No, what this Orlando Sentinel story does tell us is how screwed up the electric industry is about a nuclear policy. One moment it's the greatest answer to America's future electricity needs. The next moment it's an astoundingly overpriced project that is not even remotely price competitive with the IN fuel these days -- natural gas.

Progress Energy, which you will recall is in the process of being acquired by large Duke Energy, was gung ho to build that Levy County plant. Then construction costs skyrocketed, Florida's supergrowth trajectory cratered (meaning less energy would be needed in the future), and the federal government continued to waffle on its support of new nuclear power.

OUC wants to invest in a nuke plant but has turned to South Carolina because the Levy project is up in the air. Even Tampa-based TECO Energy, parent of Tampa Electric, has expressed interest in investing money in a nuke plant.

So where does this leave us? With an Orlando-owned municipal electric utility fishing to invest in a nuke plant in a distant state. With Progress Energy Florida stalling on its Levy project (they'll pursue a license for the plant, then "see" if it's worth going farther along). And with Progress Energy Florida customers continuing to pay extra premiums in their everyday electricity rates to be allocated to a nuke plant that may or may not ever be built.

That's a whole lotta dough being handed over for a plant that's stuck on Maybe.

-- Robert Trigaux, Times Business Columnist

 

[Last modified: Friday, January 28, 2011 7:39am]

    

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