Maybe Jeff Lyash is playing out his bad poker hand and bluffing. Maybe the Duke Energy executive told the Florida Public Service Commission this week that Duke definitely will build the Levy County nuclear plant just to keep the utility's options open and the con on consumers going. Or maybe Lyash has too much of himself invested in the project he promoted as Progress Energy's chief executive before the utilities merged. But this is a high-stakes game that should not be played with ratepayers' money, and the PSC or the governor or somebody should put a stop to it.
There is no rational argument to force Progress Energy customers to keep paying in advance for a nuclear plant that is too expensive and too far down the road. The cost has soared to $24 billion, the plant would not generate power until 2024 and the energy landscape is quickly changing. Yet the PSC has rolled over, the Legislature refuses to repeal a 2006 law that lets Progress bill customers in advance, and Gov. Rick Scott is silent. Who is going to stand up for consumers?
Just last month, Duke Energy CEO Jim Rogers told the PSC that no decision would be made on whether to build the plant until the federal operating license is secured, which is likely two years off. Yet Lyash left no wiggle room this week when he told the PSC that Duke plans to build the plant and start construction in 2016. Maybe Duke figures that confident reassurances are what regulators want to hear at the PSC, which routinely rubber stamps the plans presented by utilities no matter how much they harm ratepayers. But if Duke wants to pursue this fantasy, it should be paying for it with money from shareholders rather than customers.
No unregulated private company would risk its own capital to pursue a project that was estimated to cost up to $6 billion when proposed and now will cost more than four times as much. No responsible business executive still would promote a project that was proposed when market conditions were so different. How many proposed condo towers that were announced before the economy tanked are being built in Florida exactly as they were originally envisioned?
Duke can pursue the Levy plant because it is immune from market forces as a regulated monopoly with a guaranteed rate of return — and because the regulators won't stop it from squandering ratepayers' money. A one-sided deal approved by the PSC earlier this year limits how much customers can be charged for Levy over the next five years, but after that, the cost could soar to from an average of $3.45 a month to more than $20 a month in 2018. That's not stopping the gouging; that's only delaying it.
The PSC, the governor and the Legislature should not accept Lyash's confident predictions at face value. They should protect consumers and stop Duke Energy from billing its ratepayers for a nuclear plant that should not be built.