A Times Editorial

PSC should delay Progress Energy's fuel cost request

The Florida Public Service Commission today should not grant Progress Energy Florida's request to burden consumers with more of the growing expense of its Crystal River nuclear plant debacle. Asking customers to pay another $140 million in replacement fuel costs in 2012 before the commission has fully investigated the plant's extended shutdown is premature and would amount to a bailout for a utility that has been less than candid with the public about its problems. The PSC should delay Progress Energy's request until at least next year, when the commission is scheduled to determine whether the utility acted prudently when it embarked on what has become an outrageously expensive do-it-yourself repair.

The cards are stacked against consumers, be it homeowners or commercial clients, going into today's PSC meeting. The PSC staff already has sided with Progress Energy, considering this year's request to pass-through costs for replacement fuel in the wake of the Crystal River outage to be no different than last year's, which was granted. The PSC knows much more than it did last year about the outage and what led to it.

Since the 2010 decision on replacement fuel, Progress Energy's estimation for when the Crystal River nuclear plant would be back online — if ever — has grown from 2012 to 2014, at the earliest. And reporting by the St. Petersburg Times' Ivan Penn has raised extraordinary questions about whether the utility's decision to self-manage a 2009 repair on the containment wall is responsible for far more serious problems. Repair costs have grown to at least $2.5 billion, and there are questions about whether the repairs are physically possible or financially reasonable.

Nothing on this project has gone as Progress Energy planned. Earlier this year, the utility thought repairs were nearly complete when it discovered a second gap that was likely caused by repairs. The Times reported Sunday the company discovered a third gap in the wall in late July, yet failed to mention the discovery during its Aug. 8 briefing to the PSC. The PSC had no indication until October, when a Progress Energy engineer, in a deposition, made a passing reference to a third crack. The company didn't file formal paperwork to that point until last week, after the Times inquired about it.

Progress Energy's decision to self-manage the Crystal River repairs was a first in the industry, and the utility also eschewed industry standard procedure in how to go about the repairs. That raises serious questions about the judgment of the utility's management, something for which shareholders — not consumers — should be held financially responsible.

Logically, the PSC has launched an investigation into whether the repairs were carried out prudently and has scheduled a hearing for June 2012. That investigation should run its course before consumers are put on the hook for more costs stemming from the debacle.

Progress Energy contends it's entitled to charge replacement fuel costs and can refund the money later if the PSC requires it or insurance covers more costs than now anticipated. But in accepting such an argument, the PSC staff once more showed how utility regulation in Florida too often favors utilities over ratepayers.

The management at Progress Energy made its decisions about how to proceed at Crystal River, and disastrous results of poor decisionmaking are the responsibility of shareholders, not consumers. Forcing consumers to bail out a utility before all the facts are known is premature, and it's most certainly unfair.

PSC should delay Progress Energy's fuel cost request 11/21/11 [Last modified: Monday, November 21, 2011 6:28pm]

    

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