In 2011, Duke Energy completed a messy $13 billion purchase of Progress Energy and entered Florida as the second-largest provider of electricity in the state, supplying portions of Tampa Bay and much of west-central Florida up to Tallahassee. Duke's arrival has since been marred by a series of missteps that range from the premature closing or shelving of its entire nuclear power generation in the state to its less-than-inspiring role as a bully of Florida's young solar power industry.
On Tuesday, Charlotte-based Duke Energy — which serves parts of the Carolinas, Florida, Ohio, Kentucky and Indiana — reported lower quarterly earnings, reflecting less customer demand for power during the mild winter. Today, Duke holds its annual shareholders meeting in Charlotte. That's where CEO Lynn Good will likely say Duke faces plenty of industry challenges. But Duke, as the nation's largest power company, she will assure us, is well positioned to handle them all.
Since Duke has never been shy about exploiting its status as a giant monopoly, we thought this week was an appropriate time to ask the utility some pointed questions. Here are three from Florida.
1. Why does Duke tout its (temporarily) lower electric rates in Florida when they remain higher than their peers' in this state and higher than what it charges its customers in the Carolinas?
Duke set its latest rate in Florida at $108.32 per 1,000 kilowatt hours. Both Tampa Electric and Florid Power & Light charge less. And Duke is adding a $2.93 monthly surcharge to cover some of the decommissioning costs of its closed Crystal River nuclear plant.
Look for Duke in the coming years to start raising rates sharply to cover the $1 billion-plus "nuclear recovery" costs it is allowed by state law to charge customers for the early work performed on its proposed Levy County nuclear power plant. While that project was shelved long before it could generate any power, Florida ratepayers are still going to get stuck for the big bill. In North Carolina and South Carolina, Duke customers pay a less costly $104 and $102 per 1,000 kwh, respectively.
Don't forget: Duke has broken ground on a $1.5 billion natural gas power plant in Citrus County, meant to replace much of the electricity lost by the early closing of the Crystal River plant. That cost, too, will be passed on to Duke customers in this state.
2. Why are Duke and its fellow monopoly power providers in Florida unwilling to be up front about spending big bucks to back a solar power initiative that misleads consumers and simply keeps control of the future of solar in the Sunshine State in the hands of big utilities?
The solar power industry and free-market groups organized Floridians for Solar Choice to push for a constitutional amendment to encourage faster adoption of solar energy in the state. In response, Duke, FPL and TECO Energy spent hundreds of thousands of dollars funding Consumers for Smart Solar, a front group designed to maintain the pro-utility status quo by leaving solar growth under the thumb of big utilities.
Recently, Florida's seven-member Supreme Court approved the utility-backed amendment's language by a split vote, 4-3. Justice Barbara Pariente lamented the decision. "Let the pro-solar energy consumers beware," she stated. Consumers for Smart Solar "masquerades as a pro-solar energy initiative." But, she added, it "actually seeks to constitutionalize the status quo" and "no real choice exists for those who favor expansion of solar energy."
3. At what point will Duke swallow enough of its pride and acknowledge building nuclear power plants to generate electricity remains a hideously expensive and economically absurd idea?
Not so many years ago, Duke was a big backer of building more nuke plants. Then it shelved its Levy nuclear plant project north of Tampa Bay, and is now stalling for time to decide whether to proceed with a proposed $12 billion Lee Nuclear Station in South Carolina. The low price of abundant natural gas makes the nuclear option too pricey. CEO Good, like other nuke-leaning utility leaders, tries to argue that nuclear power can help replace the lost power from closing dirty coal plants and meet the policy goals to fight climate change. If that's true, where are all the announcements by big power companies eager to begin building more nukes?
Contact Robert Trigaux at firstname.lastname@example.org. Follow @venturetampabay.