It comes at a steep price, but finally someone appears to have been held accountable for the mismanagement of Progress Energy and its nuclear power debacles. Duke Energy abruptly parted ways this week with Bill Johnson, the former Progress Energy chief executive who was supposed to be the top official for the merged companies. If the Florida Public Service Commission and the Legislature had been similarly aggressive, ratepayers would not be on the hook for billions in costs tied to one nuclear plant that's broken and another that may never be built.
Duke made the announcement that it was replacing Johnson as CEO of the nation's largest electric utility with Duke Energy CEO Jim Rogers just hours after the merger. The merged company's board, which is dominated by former Duke board members, was so eager to make the switch that it was willing to pay Johnson up to $10.3 million to go away. That is a ridiculous sum for someone with his track record. But that pales in comparison to the money on the line as Duke decides what to do with the damaged Crystal River nuclear plant and whether to proceed with the proposed nuclear plant in Levy County despite soaring costs.
Perhaps a fresh set of eyes will help Duke see what Florida regulators and state lawmakers refuse to acknowledge. First, it's time to pull the plug on building the Levy County nuclear plant. The cost has jumped from $5 billion when the project was announced in 2006 to $24 billion and rising. Conditions have changed since the plant was first proposed, with natural gas prices dropping and the weak economy reducing projected demand for electricity. The only way out would be for Duke, with its considerable financial resources and influence, to find a partner for the plant that would take some of the burden off Florida ratepayers. Good luck with that.
Second, there is reasonable doubt about whether the shuttered Crystal River nuclear plant is worth fixing. Progress Energy badly botched its do-it-yourself repairs and the plant has been shut down since the fall of 2009. Regardless of whether the plant is fixed or another natural gas plant is built to replace the power, ratepayers will be on the hook. But if Rogers acts as decisively as the Duke board did in picking him to replace Johnson, Duke's new Florida customers can only benefit.
Compare Duke's decisionmaking with the failure to grasp reality in Tallahassee. In February the PSC approved a limp deal with Progress Energy that provided a modest refund but still raised rates and let customers continue to be billed in advance for the Levy project for the next five years. And the Legislature has not lifted a finger to repeal the 2006 law that foolishly allowed electric utilities to bill customers for these advance nuclear construction costs even if the plant is never built.
This is what it has come to in the Sunshine State: The best hope utility customers have to protect their wallets comes not from regulators or legislators but from the new CEO of the nation's largest electric company. That speaks well of the highly regarded management from the old Duke Energy, but it reaffirms the toothlessness of the industry lapdogs in Tallahassee.