1. Opinion

Editorial: Utility regulation needs overhaul

Duke Energy announced on Feb. 5, 2013, that it would close the crippled Crystal River nuclear plant.
Duke Energy announced on Feb. 5, 2013, that it would close the crippled Crystal River nuclear plant.
Published Oct. 14, 2013

Duke Energy is poised to collect $3.2 billion from its customers for its mistakes, and no one is going to demand a full explanation of how such inept management happened. The settlement the Public Service Commission is expected to approve this week regarding two botched nuclear power projects is the grossest example yet of how the power companies control Tallahassee. House Speaker Will Weatherford and Senate President Don Gaetz — both of whom have Duke Energy customers among their constituents — should make it a priority to re-examine the state's entire utility regulatory landscape and create more balance toward consumers.

In other states, utility regulators might stand up to Duke Energy on Wednesday and demand a fuller explanation of its mistakes at the Crystal River nuclear power plant and a now-scuttled nuclear plant proposed for Levy County. Or Floridians could count on an effective public counsel, who represents ratepayers, to negotiate a fairer settlement. But Public Counsel J.R. Kelly, often the lone voice in Tallahassee for consumers, is cutting his losses, saying the Legislature has so stacked the law against the consumer that the settlement — which claims to help consumers avoid another $2 billion in power costs — is the safest bet.

That's hard to swallow, particularly given that Duke Energy gets to avoid explaining how Progress Energy, which merged with Duke last year, turned a routine repair job into a debacle that forced the closure of the Crystal River nuclear plant.

What the public does know is largely from a 2-year-old series by the Tampa Bay Times' Ivan Penn — not from any PSC investigation. A new document the Times acquired last week further exposes Progress Energy's hubris in doing a repair job that 34 other plants had outsourced. Ultimately, Progress Energy workers loosened just 27 tendons on a containment wall before cutting into it — 65 fewer than one expert recommended and 38 fewer than another. The result was cracks so severe they could not be repaired and the plant was shut down.

Duke also won't have to answer for the $250 million in profit it collected by leveraging the state's 2006 advanced nuclear cost recovery fee law for a proposed expansion at Crystal River and a promised Levy County nuclear plant. For years the company collected money toward the Levy plant's construction, even after it appeared obvious the project had grown too expensive. Tampa Bay lawmakers led an effort this spring that weakens the nuclear cost recovery law going forward — but they should have insisted on repeal.

Power companies already have a deal most businesses in Florida would love: a guaranteed profit margin in a region where they are a monopoly. But when the PSC signs off on this settlement Wednesday, it's setting the dangerous precedent that in Florida, utilities can repeatedly mismanage projects and it is the customers — not shareholders — who pay. Weatherford and Gaetz should be demanding change. Florida needs a new approach on regulating utilities.