Warren Buffett wants what Florida lawmakers gave utilities: Billions in no-risk money for nuke plants
Wake up and good morning. Well, well. Florida lawmakers' misguided 2006 gift to the nuclear power industry -- to allow power companies like Progress Energy to simply charge customers long in advance to build nuclear power plants that private lenders would never touch with a 10-foot pole -- is now a recognized gravy train trend that others in the country want to get their hands on.
One sharp investor keen on recognizing a no-risk financial ticket to build a nuclear power plant on the back of rate payers is billionaire Warren Buffett (above, AP photo). His control of a power company called MidAmerican coincides with lobbying efforts to convince Iowa lawmakers to approve a law that -- just like Florida's -- takes away market discipline and allows power companies to add much of the costs of building nuke plants to customers starting many years before any nuke plant would even begin operating.
The nuclear industry is attempting to expand the use of something called Construction Work in Progress (CWIP), also known as "advance nuclear cost recovery" for financing nuclear plants. It's an absurd concept, bullied into law in Florida by high paid utility lobbyists who convinced Tallahassee's abundance of dim-witted legislators that forcing customers to pre-pay for fantastically expensive nuclear power plants 10 years or more in advance was somehow a really good idea. In fact, that is one of the worst ideas ever endorsed by state lawmakers -- and that's saying something -- who remain clueless of the extraordinary rate hikes Floridians will be facing in the next decade well before any nuke plant even begins operation.
We may as well post signs at the borders of Progress Energy's 32-county service territory:
Warning to all ye who enter planning to live here or relocate a business. The price of electricity, already absurdly high compared to neighboring Tampa Electric or Florida Power & Light, will skyrocket in the coming years. Woe to those thinking they can be competitive in this market at these electric prices. Read more here.
A few brave lawmakers are still trying to do something about this CWIP injustice. State Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee (photo, right), went to court this week to challenge the constitutionality -- my how those who created the U.S. Constitution would cringe at CWIP -- of Florida's advanced nuclear cost recovery, Sunshine State News reports. And she is refiling HB 4301 to repeal it entirely.
Florida Sen. Mike Fasano regrets his voting for advanced nuclear cost recovery in 2006 and is trying to tell the people in Iowa to beware. His opinion piece urging Iowans to reject this form of nuclear plant financing on the backs of customer appeared earlier this month in the Iowa Press Citizen.
If the free market rejects nuclear power plants as too risky and way too expensive to finance, why should we be building such projects with a method smacking of indentured financial servitude? Alas, Florida lawmakers will never get it while the power industry pours massive dollars into their political coffers. What a system.
-- Robert Trigaux, Business Columnist, Tampa Bay Times