Bill Johnson

Crystal River Crack: The Moral Hazard of Private Utility Companies

About fourteen months ago, I wrote about the Florida Containment Dome Crackers who had the bright idea that they could save $15 million while refurbishing the steam generators at the Crystal River nuclear power plant in 2009. They wound up cracking the containment dome because they had no clue on managing this complex project: it was the managing engineering contract they decided to bypass to save money. Yesterday, Duke Energy, the successor to Progress Energy (more on that change in a bit), finally announced that they will no longer pursue the repairs and that the plant will be closed. The math has only gotten worse since my earlier report. Now the overall cost estimate for the repairs, replacement energy while the plant is down and construction of a new gas power plant is up to $3 billion from the earlier $2.5 billion estimate. Of those costs, insurance will pay $835 million and Duke’s customers will pay the rest. Most depressing of all is that the Tampa Bay Times’ Ivan Penn, who has been the go-to source on this story since its start, reports that Duke will pocket $100 million of the $1.3 billion expended to date on the “upgrade” to the plant. Clearly, the regulatory environment in Florida enables private companies posing as public utilities to feed their addiction to public funds without consequence for bad decisions. In fact, Duke has now been rewarded with $100 million when their predecessor only sought to pocket $15 million. Rate-payers will be stuck with a bill for over $2 billion, some of which it appears to me Duke will be allowed to pocket while building the replacement plant.

Meanwhile, Citrus County, where the plant is located, is looking at 600 lost jobs and a huge blow to its tax base (the replacement gas plant will be on the Atlantic coast instead of the Gulf coast where Citrus County is located):

Shutting the plant would drop Duke Energy’s tax bill, which was $35 million, to at most $13 million, an executive of Duke subsidiary Progress Energy Florida told the county last month.

That shortfall, equal to a fourth of the county’s general fund, could have dire consequences for schools, safety and public services in this expanse of forests and strip malls less than 80 miles north of Tampa.

The locals see tough times ahead:

In the midst of the Crystal River fiasco, Progress Energy entered into a merger agreement with Duke Energy. Despite Duke being the larger entity, the original merger agreement called for Progress CEO Bill Johnson to be head of the new combined company. The deal closed in July of last year, but Johnson’s tenure as CEO lasted only a few hours. From behind the Wall Street Journal paywall: Continue reading

Emptywheel Twitterverse
emptywheel @chinahand And American-style dick waving always works so well with Chinese officials playing a long game.
6mreplyretweetfavorite
emptywheel @KailiJoy Who's saying the opposite? They're saying the now-50+ year old kid should have sued in public?
7mreplyretweetfavorite
emptywheel @manish_vij What it does INSTEAD of saying, "FISC was wrong" is say "you need an SST to narrow bulk for this law," but doesn't say how far.
11mreplyretweetfavorite
emptywheel @manish_vij Congress had never knowingly bought off on that definition before. This bill doesn't redefine the term, thereby leaving in place
14mreplyretweetfavorite
emptywheel @manish_vij The "bulk" is tied to the definition of "relevant to," which bill doesn't touch, and therefore ratifies as FISC interpreted.
15mreplyretweetfavorite
emptywheel @manish_vij No. Again, the bill DOES prohibit IC-definition bulk collection on Verizon, but not (explicitly) on Western Union.
17mreplyretweetfavorite
emptywheel @B_Meson I don't think I'm available before. So go ahead. @pdp7 @tinleyharrier @jujueyeball
18mreplyretweetfavorite
emptywheel @manish_vij Right. Those are communications corporations. That says nothing abt companies like Western Union, Visa. @Krhawkins5
18mreplyretweetfavorite
emptywheel @manish_vij And again, that's all IC's definition of bulk, not ordinary human definition. @Krhawkins5
21mreplyretweetfavorite
emptywheel @manish_vij Right now selector for dragnet is "Verizon," which is bulk. That does not prohibit use of non-communications corps. @Krhawkins5
22mreplyretweetfavorite
emptywheel @manish_vij IMO (there is disagreement) it IS swiss cheese for non-comms. For comms will end IC-def bulk under FISA @normative @Krhawkins5
25mreplyretweetfavorite
emptywheel @manish_vij But it's kind of wrong Q bc it accepts IC definition of bulk, which is not normal English def. @normative @Krhawkins5
27mreplyretweetfavorite
May 2015
S M T W T F S
« Apr    
 12
3456789
10111213141516
17181920212223
24252627282930
31