Progress Energy Florida sued over nuclear plant financing scheme

[Dr.Phool]

Source: Southern Exposure, Institute for Southern Studies.

Progress Energy Florida sued over nuclear plant financing scheme
Progress Energy is facing a lawsuit over its requirement that customers pay in advance for a planned new nuclear plant on Florida' s Gulf Coast. The suit was filed on behalf of the nonprofit group Citizens for Ratepayer Rights.

"We tried everything to get someone to listen -- the Governor, House, Senate, , Attorney General -- anyone that would help stop the madness of allowing $17 billion to be collected by Progress with no requirement that any service be provided nor the nuclear plant even be built at all," said Suzan Franks, the group's founder. "We hope the courts will see this for what it is -- a privilege and lending of the state's taxing power to a private corporation, which is prohibited under the state Constitution."

First proposed by the company in 2006, the Levy County plant would include two nuclear reactors. The chosen site is close to Progress Energy's existing Crystal River Energy Complex.

In October 2008, the Florida PSC voted to allow Progress Energy to charge its customers an additional $11.42 per 1,000 kilowatt-hours to pay for the Levy County facility, the cost of which has been estimated at around $14 billion, plus $3 billion for needed power transmission upgrades. The state certified the site last August with the requirement that the company shut down two coal-fired units at Crystal River.

The company is planning to install at the Levy County site two Westinghouse AP1000 reactors -- the design for which still has not been approved by the U.S. Nuclear Regulatory Commission due to safety concerns. The Shaw Group's nuclear division has the contract to build the reactors, which are supposed to be operational by around 2020.

By Sue Sturgis on February 11, 2010 2:56 PM

Read more: http://www.southernstudies.org/2010/02/progress-energy-florida-sued-over-nuclear-plant-financing-scheme.html

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www.cfrpr.com

Progress Energy bought off the legislature to allow them to add a 30% surcharge to customers electric bills. They MAY break ground on the plants in another 10 year. Then again they may not. It will take another 15+ years for the plant to go online. Half of the people paying to build this thing, for a private corporation will be dead or gone before they realize any benefit.

And in any case, the funding should be paid by the stockholders, not the ratepayers.

Today Progress energy announced 4th quarter profits were up 53% due to "interim" rate hikes.

Disclaimer: I am a plaintiff in the lawsuit, and a director for CFRPR.

on edit: Mods, please don't move to the Florida forum. Progress does business in several states.

www.cfrpr.com

[Dappleganger]

1. K&R

[phantom power]

2. If you win your lawsuit, what will happen...

Are you suing to get rid of the rate hike?

If Progress agrees to abide by a legal promise to deliver the energy, will you drop the suit?

[Dr.Phool]

3. Yes and No.

We are suing to not only get rid of the surcharge, but also to make them refund the hundreds of millions that they've already collected off of it.

And No, we won't drop the suit if they promise to deliver the energy. It's the stockholders and the bondholders responsibility to pay for capital improvements. Progress will be selling the power on the wholesale market, and they will keep all of the profits, from the ratepayers investments.

[phantom power]

6. There's something about the capital improvements issue I don't get...

I've posted about this before, but I still don't quite see why only stockholders and bondholders can pay for capital improvements. Isn't it a company's prerogative to build profit margin into their rates, and invest that profit in capital improvements?

Is it something pertaining to Florida law regarding utility companies?

I know that here in AZ, our electric utility raises rates to pay for new capacity, although they have to get state approval, it's not unilateral. And they've never attempted anything as extreme as a 30% rate hike. Although 3% here, 4% there adds up over time too.

[Dr.Phool]

9. Back in the late '80s I sold insulation.

At that time, utilities which were then, and still should be, regulated monopolies. They were guaranteed a rate of return on investment at between 4 and 5 percent, because they were considered rock-solid, safe investments.

Then they got deregulated. Progress is now guaranteed a return of over 11% on investment. The company can save some of that money, and maybe skimp a little on the CEO's salary if that's not enough. And maybe not spend so much on legislators and lobbyists. During the last cycle, they donated the max to EVERY legislator, and hundreds of thousands to both parties.

Also, the way they passed the bill allowing this was sneaky. The provision was slipped into what was a pretty good energy bill,at the last second. It was never read in committee. It never made it to the final bill synopsis that every legislator reads. The ONLY 2 senators who were aware of it's existence, were the 2 who slipped it in. Only one member of the house caught it, and voted against it.

As for their perogative to build a profit margin. Sure. Cut the dividend. And their being a monopoly, neither me, or my neighbors, or any small business in their service area has a prerogative to say no thanks. We're hostages. We can't go anywhere else.

[phantom power]

10. The monopoly issue is huge. Utility de-regulation was a terrible scam.

Like, how many electricity companies is a person ever likely to be able to choose from?
:shrug:

[dixiegrrrrl]

4. Legal [promises have no meaning anymore.

There are many many cases where utilities, towns, government entities, you name it,
made money at the expense of the taxpayers, the bondholders, the rate payers and then down the raod
reneged on the deal, walked away, money spent, no way to hold them accountable because they were
a corporation or variant of same.
Bond defaults in normal times are not uncommon. Bonds ( and US Treasuries, btw) are a promise to pay in the future.
These guys in Fla.get away with it, there will be more such plans popping up.

[spin]

5. The cost of electricity is killing me in this cold winter ...

I hope you win.

It seems my heathcare provider and my power company are out to screw the hell out of me.

The recovery from the recession is going to be a slow go if no one has any money left after paying for heathcare and power.

[bread_and_roses]

7. K & R!!!! Well done, Citizens!

Such an egregious blatant rip-off they perpetuated - I shouldn't need to say "good luck" since the merits are plain on the face of it, but I say it anyway - and you are all brave souls, going up against such deep pockets.

[madrchsod]

8. .....and the taxpayers will pick up the insurance policy!

[Downwinder]

11. Another scenario. In ten years the money collected will be used

for an LBO of the company.

[Roland99]

12. Big K&R!!!!

[ozymandius]

13. Good on ya, Mate!

You folks really are doing the people's business with this lawsuit.

This is sickening. This company would take money out of the pocket of anyone who is a customer to boost the dividends of its shareholders. Screw 'em.