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FPL, Progress Energy, Florida’s Nuclear Fraud

| March 25, 2011

florida power and light progress energy nuclear power

A safety net at taxpayers' and ratepayers' expense. (© Klaus Leidorf)

FlaglerLive Editor Pierre Tristam’s weekly commentaries are broadcast on WNZF on Fridays just after 9 a.m. Here’s this week’s.

Japan isn’t the only host to a nuclear power disaster. So is Florida.

The state has five of the nation’s 104 nuclear reactors. They’re run by Florida Power and Light  and Progress Energy. Both companies want to build two new reactors each. When Progress Energy first proposed the plan several years ago, it promised that the new reactor design it was buying from Westinghouse would cost less money and be completed more rapidly than previous reactors. The cost was to be $2 to $3 billion per reactor. Just two years ago the Progress Energy CEO was projecting the first one would be hooked up by 2016. That date has been pushed to 2022 at the earliest. Costs have since exploded to more than $10 billion per reactor, and in reality there’s no telling when construction will start, let alone when the reactors would go online. That uncertainty had set in before the disaster in Japan. Expect those costs and delays to more than double by the time the lessons of Japan are digested and those reactors are built, if they’re built.

Yet that’s not the disaster. The way the two companies want to go about paying for these radiating white elephants is. Put aside the matter of nuclear energy’s questionable safety and unresolved waste-storage issues. Let’s assume that nuclear power is a good alternative to fossil fuels. Let’s assume that if companies are willing to build them, they should have that right. It’s free enterprise.

But it isn’t. FPL and Progress Energy aren’t assuming the risks of building those plants. Taxpayers are. Several years ago the Florida Legislature had the unwise idea of allowing the two companies to charge customers upfront for the cost of building nuclear plants sometime in the future. It’s an unheard of arrangement. The two companies took full advantage. Progress Energy alone charged its customers almost $1 billion extra between 2008 and 2009 under that racket. FPL charged several hundred million too.

They claim they need to because the costs are so staggering. But they’re already getting a free ride. In 2005 Congress approved a colossal gift to the nuclear power industry at taxpayers’ expense, providing loan guarantees on 80 percent of a company’s borrowing. Two years later Congress upped the guarantee to 100 percent. That means taxpayers are the cosigners on these loans. The plans go bust, the companies are in the clear. Taxpayers are on the hook. That’s not all. The Energy Policy Act of 2005 also shells out $125 million in annual tax credits for every 1,000 megawatt of electricity produced for up to eight years. That was also meant to offset the cost of construction. Those freebies weren’t enough. Florida had to slam rate-payers some more ahead of time. And that money Progress Energy and FPL have been collecting so far? They don’t have to pay a dime of it back even if the reactors are never built.

They call that free enterprise. Needless to say, in the event of an accident, even a contained accident, construction costs look puny compared to the clean-up and human costs.

That’s still not to say that companies shouldn’t build these things. Maybe they should. But on one condition. If millions of people around the plants have to assume the risk of accidents, and if we’re still living in a free enterprise system, it’s only fair that the companies assume all the costs of construction according to normal business models. No subsidies, no up-front schemes, no loan guarantees at taxpayers’ expense. If they can still make a go of it, that means investors are as self-confident about nuclear energy as these companies pretend to be. If not, then it’s time to end the nuclear charade and invest those billions in less glowing alternatives.

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6 Responses for “FPL, Progress Energy, Florida’s Nuclear Fraud”

  1. Rob says:

    Public money supporting private enterprise.

    Where is Rick Scott and his teagroupies?

    There is more concern with dogs on the beach than getting fleeced by the state and electric companies.

  2. palmcoaster says:

    My appreciation goes to Flaglerlive for the courage to bring this abuse of the taxpayers into the open.
    We are fleeced daily with forced funds to fatten the wallets of the greedy wealthy corporations and billionaires. Then of course there are no sufficient funds to pay for education, our government services , health care and the repair of our national infrastructure falling apart. Like a cancer in our country eating us inside out. A middle size home built in the sunbelt with self sufficient solar energy panels on its roof at a cost of about 30 to 40,000 will end the need for this nuclear plants and its nuclear waste that will take thousands of years to dissipate if ever. Why all those billions are not invested to provide loans for this individual solar systems in homes? Because the GREED that propels the powerful in control. Why to help the little guy with its individual solar system when the nuclear barons can get richer instead.
    The Gop Tea Party agenda today promotes the following:

  3. William says:

    Another example of corporate welfare, writ large.

    Taxpayers on the hook for business endeavors? Let me hear you say “hell yeah!”
    After all, the Fannie & Freddie model worked so well, didn’t it?

    Public health care? Hell no! That’s socialism!

  4. PC MAN says:

    Privatize profit & Socialize loss, the ultimate heads I win tail you lose, ask GE it’s working out fantastic for them.

  5. markinCR says:

    Nice piece. 1 correction, the Japanese reactors are a 40 year old design while the new reactors are conceptually different in many respects.
    In Japans defence, this took a combination of calamities working simultaniously to create the disater they now face. An eathquake like they never imagined would happen AND a tsunami that wiped out electricity and created a conflagration they had to battle at the same time. I work at a nuclear plant and while I am assured in our dedication to the safest operation possible, I do not have the greatest confidence that we would do well if a meteor flatened the containment building. So exactly what do you plan for and what risk is to be deemed acceptable?

    Other than misrepresenting the reactor comparison this was an excellent piece. No free money, no no-risk investments at tax payer expence.

  6. bob williams says:

    Letter to our local editors…………

    The Crystal River Nuclear Plant in Florida is down and has been down for
    19 months. Progress Energy has spent $440 million trying to
    fix the plant and it still has a huge crack in it.

    Progress has no idea when the repairs will be finished.
    In fact, they have no idea how to fix the present problems.

    Doesn’t that sound like something you are currently hearing
    from the great Japanese ? How about the Crystal River plant
    dumping 100 million tons of radioactive waste into the
    Gulf of Mexico….would that get your attention ?

    This would be an excellent time to mothball the plant.
    Take it offline before it fails. It is past its intended age
    and is no longer safe.

    Keep in mind readers, if you live within 50 miles of this
    plant when it melts down you will become radioactive,
    so will your children and your beloved grandchildren.

    Stop the Crystal River Nuke plant now.

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