You’re the new CEO of Duke Energy Florida, the fattest rooster in the coop when it comes to publicly traded power utilities.
And you’re on a roll. Your conglomerate’s fresh off a regulatory rout that saw government watchdogs turn lapdogs and look away as you merged with your only serious competitor in the region. Just five months on the job, you’ve inherited a textbook monopoly and the good news just keeps a-comin’.
For years now your best and brightest ex-pols and rainmakers have been hard at work, persuading lax federal and state regulators that nuclear is the new nuclear.
The pitch: Give us seed money and the all-clear to raise rates, and we’ll fix one damaged (and insured) nuke plant and build another. One year and millions of lobbying dollars ($19 million in 2011/2012) later, you run the table. The seed money is on the way and the crony contractors are ready to ink the work orders.
But this is where your plan goes awry and the new gig you inherited gets harder.
Turns out there’s a $5 billion stick in Duke’s platinum chrome wheel: The combined costs of the projects will take decades to recover, by which time the facilities will age out and natural gas will likely have supplanted nuclear as the go-to fuel source.
The decision is made to abandon the nuclear plants and a course is struck on how to recover the lost billions: Spread the pain and pocket the gain.
You oversee a series of negotiations with the state’s Public Service Commission that by a 4-1 vote result in a simple do-over that will spare Duke the consequences of its own actions. And make a tidy sum for its trouble.
The bill is split three ways:
• Insurance: $835 million
• Investors: $1 billion
• Customers: $3.2 billion
It’s a hard sell; but as your company spokesman reminds the outspoken opponents of the settlement, Duke is well within the 2006 law that allows utilities to charge in advance for major nuclear updates.
He can look the reporters in the eye. No regulations have been skirted.
And the company? Thanks to another Florida law that permits utilities to take a cut no matter the eventual outcome of a nuclear-based project, Duke gets to pocket a cool $100 million for not an additional kilowatt of service.
Not a bad first five months on the job.
But some newly monopolized Floridians are angry at you and Duke’s sweetheart settlement. The notion of cleaning up the mess they didn’t make is somehow not sitting well.
News is out that based on the company’s own calculations, your 1.7 million customers will foot the roughly $1,900 per person hike incurred by the company’s missteps – a reality of the final deal despite promises that rates will see an initial dip.
And while your shareholders likewise registered shock at the temporary nosedive following the settlement announcement (they’ve taken a hit of $1.42 per share) at least they’re making it up as Duke/Progress stocks continue to trade at $70 and pay dividends despite all the negative press.
But you’re more concerned about how the rate hikes are being received among proud Rubio conservatives and returning Republican snowbirds – the folks who elect the folks who keep the bar low when it comes to most things corporate.
Seems even they get a hitch in their Bermuda shorts when business is given so much latitude in so public a fashion.
Add to that the online scuttles and letters to the editor of major newspapers from the normally hands-off crowd that has taken notice of the complicit silence in Tallahassee.
They wonder what’s happened to their state that your energy behemoth – the largest power company in the nation – has been allowed to camp out on their doorstep for near-free, promising to keep rates low as it sticks them with the bill for its screw ups.
Right now the sample size is too small and primaries too far away to say if the members of the Public Service Commission and state’s most influential politicians will get blowback for their cooperation with you.
But as a Tampa Bay Times contributor observed, this much is clear: Florida has never paid so much just to get nothing.
Don Rollins is a Unitarian Universalist minister in Tarpon Springs, Fla. Email firstname.lastname@example.org.
From The Progressive Populist, December 1, 2013
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