Soon to be ‘former‘ Gov Charlie Crist’s stacked PSC halts rejects $10 Billion in FPL projects and acts like its a good thing. Chief among these crucial projects was the construction of two new units at the Turkey Point commercial Nuclear Power Plant, and calls it a “win” for the consumer. I suppose building two Nuclear Power Plants that represent a Supertanker a day of oil we don’t have to import doesn’t help Floridians as much as all those Shovel Ready jobs from Obama’s Stimulus package:
Florida Power & Light has suspended work on an estimated $10 billion in projects — including the controversial expansion of Turkey Point nuclear plant – after state regulators rejected the utility’s proposed rate hike.
Gov. Charlie Crist said he doubts there will be layoffs and called the rate decision a “win for the consumer.”
Crist had opposed FPL’s rate hike and appointed two outsiders to the five-member commission last year after some critics said it was too “cozy” with utilities.
Since then, the commission rejected FPL’s proposal for a $1.5 billion natural gas pipeline, required the utility to beef up energy conservation goals and all but rejected the utilty’s base rate increase. When asked last year about investors’ concerns that Florida is moving away from a state that’s considered utility friendly, Crist shot back, “To one that’s people friendly?”
http://www.sun-sentinel.com/business/fl-fpl-scalebacks-20100115,0,6703079.story
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cwilson (Diary) Saturday, January 16th at 12:07PM EST (link)I’ve always been a little confused about the practice of utility companies asking for extra dough explicitly to fund specific expansion projects.
That’s not the way business expansions are usually done.
You borrow the money to perform the expansion, and then once the (new factory, new machinery, new plant) comes on line, part of the (hopefully expanded) company revenues go to retire the debt.
In this context, that means that FPL would go to the PSC after completion of the new plant, and petition for a rate increase based on documentation of their then-current expenditures, including the debt service.
In a regulated market, obviously the PSC would have a say in the initial decision (FPL would have to petition) to build the plant in the first place: but that’s a relatively easy decision, politically. You’re not “approving higher rates for consumers”, you’re “expanding energy supplies” — the only political component is the anti-nuke fringe wackos. (Sure, this hides the actual cost until later — but since when is that a new thing in politics?)
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They'd still need a rate hike to pay off debt (nt)
Neil Stevens (Diary) Saturday, January 16th at 12:13PM EST (link)RS contributing editor, technical administrator, and “a hardy variety of crabgrass.”
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flacracker (Diary) Saturday, January 16th at 1:09PM EST (link)FPL can not raise their rates at all without the PSC’s approval, they’ll need those future funds to pay of $10 Billion in capital investments. Since their rate hikes will be pennies per KWH, it will take a very long time to pay that heap of cash off. Since the PSC is so very reluctant to grant this “private” firm permission to raise prices, it seems prudent to get permission before spending the money.
Florida’s residential power rates are just a few cents above the national average. The hike asked for would not significantly change their standing.
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html
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