Progress Energy

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 @Popehat Which in reality means a danger to the counterinsurgency cause if you're talking with targets you get in the way of the shooting.
21sreplyretweetfavorite
emptywheel @Popehat Got same treatment Anthro PhDs they sent to Afghanistan to try to actually learn who we're killing: deemed a danger to themselves
1mreplyretweetfavorite
emptywheel I think I just saw 10 top Neocons cast their 2016 presidential vote for Hillary. Doesn't she have to collect signatures first?
4mreplyretweetfavorite
emptywheel @Popehat Don't forget counterproductive escalation! Perfect expertise!
5mreplyretweetfavorite
emptywheel RT @Popehat: Reuters: Obama to nominate Jay Nixon as Secretary of Defense, citing governor's background in counterinsurgency, rapid reactio…
6mreplyretweetfavorite
emptywheel Shorter Michelle Flournoy to Obama: I don't want to be in charge of losing your wars. http://t.co/QcffRcLvBp
7mreplyretweetfavorite
emptywheel @MikeDonnellyJr I had forgotten about estate tax. Another big one--you're right. Cause why should the Waltons pay their share? @lolgop
21mreplyretweetfavorite
emptywheel RT @brycecovert: Wives carving turkeys: “a sure sign that American women have gone beyond achieving plain equality” http://t.co/504tCZ8Cs2
35mreplyretweetfavorite
emptywheel @ProducerCoop To be fair, 23 isn't as bad as it used to be, so if you come in that way you can sort of make it. 94 too. The rest, agree.
36mreplyretweetfavorite
emptywheel @Praetorzic Yup. War funding will be huge. Subsidies to energy companies. Tax cuts for corporations. All stuff they've promised @LOLGOP
37mreplyretweetfavorite
emptywheel Someone should make it their full-time beat to track all the ways GOP gonna blow the deficit again. It'd be busy job.
42mreplyretweetfavorite
emptywheel MI GOP wants to raise speed limit on roads they refuse to fix enormous potholes in. http://t.co/ZPCoOUfUqf Is it auto company welfare plan?
44mreplyretweetfavorite
November 2014
S M T W T F S
« Oct    
 1
2345678
9101112131415
16171819202122
23242526272829
30