NEIL

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 @wizardkitten All tall rich white guys from MA look the same you know. @amyrchapman
2mreplyretweetfavorite
bmaz @dougsinsbca @Gaius_Publius @nakedcapitalism @mattkbh I read it just fine the first time, thanks. Its a rehash of new and old Pando bullshit
12mreplyretweetfavorite
bmaz RT @lefarkins: Heroes of the day Kaci Hickox and Judge Charles LaVerdiere. LaVerdiere: “We would not be here today unless... http://t.co/D
27mreplyretweetfavorite
JimWhiteGNV B a c k s p a c e E N G H a c k A t t a c k Z I
29mreplyretweetfavorite
emptywheel RT @SacconeSpeaks: Great story about what's at stake in #COSen race when it comes to #NSA reform & strong intel oversight: http://t.co/1d1M
37mreplyretweetfavorite
emptywheel Wyden lists 6 other reports where CIA officers' roles released under pseudonym--what CIA is fighting here. http://t.co/oqE1li0k3g
38mreplyretweetfavorite
bmaz @calvincoolidge3 @joanneleon @carwinb Which of course would be grossly improper and highly irresponsible.
53mreplyretweetfavorite
bmaz @calvincoolidge3 @joanneleon @carwinb It is. There are a group of people that think the docs should be dumped and open sourced.
54mreplyretweetfavorite
bmaz @carwinb @joanneleon FLM does not owe the "public" squat as to blithely dumping docs. They have been judicious and appropriate.
1hreplyretweetfavorite
bmaz @ShannonRitenour @McBlondeLand Also startlingly devoid of facts to support the accusations.
1hreplyretweetfavorite
bmaz Wait, Clair Williams is "under investigation" because she cannot attend Bernie Ecclestone's crappy press conference? http://t.co/9Cw2UUFL1g
1hreplyretweetfavorite
bmaz @Gaius_Publius @nakedcapitalism @mattkbh Yeah, sorry, you lost me when you stab at First Look yet take the bleatings of Pando credibly.
2hreplyretweetfavorite
October 2014
S M T W T F S
« Sep    
 1234
567891011
12131415161718
19202122232425
262728293031