Plagued by a stalled merger with Duke Energy, an investigation into its broken nuclear power plant and new resistance to charging Florida customers for a future nuke plant, Progress Energy unveiled a complex settlement proposal with state regulators that does what the company does best.
In the process, Progress Energy may successfully avoid any accountability of what happened at its shuttered "Crystal River 3" nuclear power plant. Hearings scheduled by state regulators to decide who was responsible for breaking the nuke plant have now been canceled as part of the settlement.
Based on extensive reporting in the Tampa Bay Times, drawing on testimony of Progress Energy employees and contractors at Crystal River 3, the power company may be smart to avoid such inquiries.
Too bad. That's something Floridians ought to know about a utility that already charges them more than other big providers of electricity in this state.
The settlement package blends separate controversies — repairs to fix Crystal River 3 and charging 1.6 million Florida customers in advance for a proposed Levy County nuclear plant — into one financial pot. Then it adds enough "what if" scenarios to confound even IBM's Jeopardy!-winning computer Watson.
What if, Progress Energy repairs or just retires Crystal River 3? Can repairs start before 2013?
What if, insurance covers Crystal River 3's repairs?
What if, Progress Energy really builds its long proposed Levy County nuclear power plant despite escalating costs?
Progress Energy can't answer any of those questions right now. On Monday, the utility's top executives held a conference call with analysts. Their most consistent message? We'll get back to you.
On the surface, the settlement plan sounds like a winner for Florida customers. Progress Energy is offering to refund $288 million to ratepayers. Company shareholders take a one-time 59-cent per share hit to their earnings.
That sum represents the extra cost of generating or buying power to replace the output of its Crystal River 3. The plant's been mothballed since the fall of 2009 after a crack was found in the wall of its containment vessel. Subsequent cracks were found after the utility's do-it-yourself repair job to the plant, raising the price to fix the aging unit — Progress Energy's sole nuclear plant in Florida — to $2.5 billion or more.
Progress Energy officials insisted on Monday that the settlement saves customers from major rate hikes in the near term while giving the company time to decide Crystal River 3's fate and either commit or forget the Levy County deal.
What the settlement does not say is that it delays the inevitable. Much higher rates await Floridians after 2016.
All of this posturing takes place at the same time that Progress Energy struggles to complete its sale to Duke Energy of Charlotte, N.C. The deal will create the nation's biggest power company. Federal regulators have balked so far, concerned that a Duke-Progress Energy combination will be too powerful.
Merger or not, Florida's state leaders seem cowed and unable to demand accountability from Progress Energy. Very few seem interested in asking how a nuclear plant broke so severely that, 28 months later, it's still not generating electricity.
It appears Progress' smoke screen is working.
Contact Robert Trigaux at [email protected]