A Times Editorial

Ratepayers stuck with nuclear plant charges

Imagine adding a garage to a house that is about to collapse. Or installing a new radio in a rusted Chevy that's up on blocks. Or buying bigger stoves for a closed restaurant that may never reopen. That is how ludicrous it is for Progress Energy Florida to proceed with plans to spend more than $200 million to upgrade the broken Crystal River nuclear plant that may never generate electricity again. Who is going to stop this waste of ratepayers' money?

As Tampa Bay Times staff writer Ivan Penn reported Sunday, Progress Energy plans to proceed with expanding the plant's generating capacity even though the plant has been broken for three years and it's unclear how to fix it — or even whether it's worth fixing. The cost to Progress Energy's 1.6 million Florida customers: $51.5 million this year, $110.2 million next year and $64.5 million in 2014. Throw in another $400 million or so for other improvements to the broken plant over the next two years. Paying for all of that would be hard to stomach if the nuclear plant were working, but it is absurd for ratepayers to be forced to pay those bills to upgrade a plant that may never be fixed.

Yet not a peep is heard from Tallahassee on behalf of Progress Energy customers. Gov. Rick Scott is quick to rail against taxes and government waste, but not against utility rate increases. Legislative leaders who passed a 2006 law enabling electric utilities to charge customers up-front for nuclear plants have not grown any backbones. The Florida Public Service Commission is controlled by the utilities, and the public counsel that represents ratepayers before the PSC claims he did the best he could in a rate case settlement with Progress Energy. Apparently, ratepayers are supposed to be satisfied that they will not have to pay for some of the Crystal River improvements until after 2017.

Here's how uncomfortable Duke Energy feels about the Crystal River mess. Hours after Progress merged with Duke last month, the new board of directors fired Progress' Bill Johnson as the CEO of the merged companies and replaced him with Duke's Jim Rogers. It turns out that Duke had commissioned its own study of Crystal River, which has yet to be made public. Meanwhile: The insurance company that covered the broken plant is not paying for damages; the estimated cost for repairs is going up; and Rogers says he is giving more consideration to shutting down the broken nuclear plant. Either way, this is not going to end well for ratepayers.

From here, it looks as though Duke is playing an expensive game of chess with the insurer, with Progress Energy customers as the pawns. The utility seems to be proceeding with improvements to the Crystal River plant as though the plant will return to operation and be better than ever if only the insurer will pay for the repairs. The problem, of course, is that Progress Energy could be found negligent in botching the original repairs and the insurer won't have to pay.

There is more than a billion dollars at stake in deciding the fate of the broken Crystal River plant and who pays for what. It's understandable that Duke Energy inherited a disaster not of its own making and is looking out for itself. Who is looking out for ratepayers?

Ratepayers stuck with nuclear plant charges 08/06/12 [Last modified: Monday, August 6, 2012 7:08pm]

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