Wednesday, June 20, 2018
Business

Unfortunate trend: Buffett wants no-risk funding for nuclear power, just like Florida gave its utilities

Florida lawmakers' misguided 2006 gift to the nuclear power industry was a doozy: to let utilities like Progress Energy and Florida Power & Light charge their customers long in advance to build nuclear power plants that private lenders would never touch with a 10-foot pole.

Now that gift is seen as a gravy train other nuclear power players in the country want to get their hands on.

One of the nation's best-known investors eager for a no-risk financial ticket to build a nuclear power plant on the back of ratepayers is billionaire Warren Buffett. His control of Midwest power company MidAmerican coincides with lobbying efforts to push a measure in Iowa that — like Florida's 2006 law — would do away with market discipline and emboldens power companies to pre-charge their customers for future nuclear power plants.

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 highly paid utility lobbyists who convinced our easily swayed state legislators that forcing customers to prepay for hyper-expensive nuclear power plants — Progress Energy's two proposed reactors in Levy County are $22.5 billion and counting — was somehow a good idea.

In fact, it is one of the worst ideas ever endorsed by Florida lawmakers, who remain clueless or indifferent to the extraordinary rate hikes Floridians will face in the next decade, before any nuke plant begins operation.

Maybe we should post signs along Progress Energy's 32-county service territory:

Warning to all who enter and plan to live or relocate a business here: The price of electricity, already high compared to neighboring Tampa Electric or Florida Power & Light, will be skyrocketing soon. Proceed at your own risk.

A few brave lawmakers are trying to do something about this pay-in-advance injustice. Florida Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, went to court this week to challenge the constitutionality of advanced nuclear cost recovery. And she is refiling a bill (HB 4301) to repeal it entirely.

Florida Sen. Mike Fasano, R-New Port Richey, regrets voting for advanced nuclear cost recovery in 2006. He's now trying to tell the people in Iowa to beware. His opinion piece urging Iowans to reject this form of nuclear plant financing ran recently in the Iowa Press Citizen.

"If passed by the Iowa Senate," James Larew, general counsel for a former Iowa governor wrote in the Des Moines Register, "the law would provide an opening for what will effectively be the largest publicly sanctioned, but privately imposed, fleecing of Iowa consumers in the state's history."

If the free market rejects nuclear power plants as too risky and too expensive to finance, why should we be building such projects?

Imposing escalating, monthly nuclear plant construction fees on rate payers for years in advance smacks of indentured financial servitude. Alas, Florida lawmakers will never acknowledge this while utilities pour big bucks into their political coffers.

Buffett's no fool. He smells opportunity. Why should Florida utilities get all the perks?

Robert Trigaux can be reached at [email protected]

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