Monday, July 28, 2014

FPL, electric utilities and Florida's shadow government: state sponsored corporatism … by gimleteye

"In Florida, to borrow an old state slogan, the rules are different." That's how a recent Tampa Bay Times editorial starts on the runaway power of the state's utilities. "This is a state where the Legislature allowed utilities to bill customers in advance for nuclear plant construction that would never generate a kilowatt of power." The editorial evokes FPL's Turkey Point nuclear plant in Homestead, where civic concerns have been steamrollered by every level of government except for a few intrepid mayors and city commissions along US 1.

From the Miami-Dade County Commission -- the unreformable majority includes District 8 Commissioner Lynda Bell -- to Governor Rick Scott and Cabinet, South Floridian voters and ratepayers can't catch a break. The Tampa Bay Times OPED focuses on the phenomenon in its backyard, "Now Duke Energy customers will pay more than $3 billion for a botched repair at the Crystal River nuclear plant that is shut down and for a new Levy County nuclear plant that will not be built. The PSC signed off on a one-sided settlement, and the Legislature rejected calls to repeal the 2006 law (early cost recovery) and made only minor adjustments."

The Tampa Bay Times OPED suggests how the Miami Herald could weigh in. The Times editorial is titled, "In Florida, Utilities Call the Shots". EOM's suggestion for the Herald OPED: "Crony capitalism and FPL".

The bottom line: electric utilities in Florida are shadow governments. Scroll through the decisions sought by FPL to advance its nuclear ambitions where two existing nuclear plants are massively violating the law and you won't find a single instance where permitting decisions have been rejected by elected officials.
Utilities in America have always been very powerful and politically influential. What changed was rise of crony capitalism as the determinant factor in the US economy, a similar spasm to the Gilded Age of the robber barons.

No so long ago, electric utilities were run by top executives for shareholders as staid businesses. The men who ran them were wealthy, but not extraordinarily wealthy. Utilities, like savings banks, were dependable. The need for reliable electricity put great emphasis on being both reliable managers, delivering low but stable returns to investors. Owning a share in an electric utility was like owning a municipal bond. Yes, electric utilities wielded influence; from the boards of the Chamber of Commerce to white glove society galas. It was always thus; crony capitalism with small "c"s.

In the past thirty years, things changed. Electric utilities were swept up in the same upheavals that spread across the economic landscape like a shape shifting wildfire. Between the dissolving of American industry in the Rust Belt, the dot.com boom and the real estate boom and bust, big utilities like FPL turned to generating extraordinary wealth for top shareholders and executives.

Utilities had viewed risk as an anathema, but as the banks and insurance giants adopted financial engineering -- freed from regulations -- as core business strategies, in their own ways the utilities shed their traditions.

Financial engineering coupled with lobbying and political access all became much more significant aspects of utilities' businesses, during a period of time in which politics became increasingly polarized and bipartisan consensus as rare as hen's teeth.

The net result: without any legislative obstacles to speak of, utilities have become like leviathans exercising Crony Capitalism with large "C"s. Utility executives are now part of the nation's .001 percent.

There is no better example than FPL's permitting onslaught in South Florida for two new nuclear reactors.

A cooling canal system for two nuclear reactors at its Turkey Point facility has been failing for many years. The canals act like a massive radiator coil, designed in the 1970s to dissipate the heat from the reactors. Only the canals aren't working.

This is a big problem for FPL as it enters the critical, final phase of its effort to permit two new nuclear reactors at Turkey Point. In 2016, its environmental impact statement is anticipated to be submitted to the Nuclear Regulatory Commission.

FPL has benefited from "early cost recovery", passed by the GOP controlled state legislature, that enables the company to spend more than $150 million per year in all the planning and advocacy for the new reactors. Current estimates for the two reactors are soaring towards $20 billion.

With deadlines looming for the new environmental impact statement, it is a matter of some urgency and even desperation to fix the problems with the cooling canal system. A huge toxic algae bloom is clogging the canals and trapping heat. Water temperatures in the FPL cooling canals are exceeding allowable limits and might shut down the facility entirely.

The problem that FPL has to overcome is not just ridding the cooling canals of the algae bloom -- using chemicals and dispersants in a way that will mock its claims for environmental stewardship -- but also the fact that hyper saline water from the canals is significantly messing up the ground water supply. FPL, long ago, pledged to the state of Florida it would fix both problems. It can't.

A super dense, saline layer of water has dropped into the aquifer and started migrating in a plume, in all directions. This problem has been tracked for several years by the state agency and scientists of the South Florida Water Management District.

FPL signed a series of consent agreements both accepting responsibility for super saline water, that can also be traced because of the presence of a radioactive isotope -- tritium -- that is embedded in the FPL water and commitments to remediate the pollution that is moving toward nearby drinking water wells serving the entire Florida Keys.

In June, using the cooling canal emergency as its reason, FPL proposed several remediation steps but also proposed writing a new agreement to cut out the state agency that has been policing and recording the corporate violations. That new agreement, an Administrative Order, needs to be approved by the governing board of the South Florida Water Management District.

The governing board members are all political appointees of Florida Governor Rick Scott.

Scott, in a recent meeting of his cabinet, approved the siting of FPL's new nuclear reactors with scarcely a single word. Years of public hearings, a lengthy court battle by environmental and civic groups, concluded in a June Tallahassee hearing with nary a whimper. (On that same day in June, the state official who lead discussion on behalf of FPL's permit -- Agricultural Commissioner Adam Putnam -- was confronted by a Tampa Bay Times reporter about secret trips he took with top state GOP officials to the King Ranch in Texas and paid for by Big Sugar. He slammed the door in the reporter's face.)

The Tampa Bay Times OPED ends with a question, "Which candidate for governor is more likely to stand up to the electric utilities and push for a smarter energy policy that emphasizes conservation and renewable energy over building more power plants?"

Its implication is clear: Rick Scott has been a disaster for the public interest. Crony Capitalism is the order of the day in Florida. Will voters be both aware and smart enough to send a message in November?



Editorial: In Florida, utilities call the shots
Tuesday, July 22, 2014 5:03pm
Tampa Bay Times OPED

This week’s Florida Public Service Commission hearings on energy efficiency reflect everything wrong with this state’s energy policy. Instead of raising modest energy savings goals, the PSC is considering cutting them.

This week's Florida Public Service Commission hearings on energy efficiency reflect everything wrong with this state's energy policy. Instead of raising modest energy savings goals, the PSC is considering cutting them. Instead of listening to the public, the PSC is hearing from electric utilities eager to slash the efficiency goals, build more power plants at customers' expense and make more money. The utilities will keep getting their way until a new governor comes along who will stand up to their lobbyists, ignore their campaign cash and break their stranglehold on Tallahassee.

Utilities such as Florida Power & Light, Duke Energy and Tampa Electric Co. have long dominated the PSC, where there is a history of commissioners and top staffers siding with the industry and magically winding up with lucrative utility jobs later. One clean-energy group recently counted one utility lobbyist for every two legislators and five former PSC commissioners working for FPL. On the rare occasion when more independent minds were on the PSC and voted against a rate increase, industry lobbyists pressured the Senate not to confirm them and forced them out. The game in the state capital is rigged, and one of the results is that Duke Energy customers in the Tampa Bay area pay some of the highest electric rates in the Southeast.

Yet Duke, FPL and TECO are arguing this week that energy efficiency programs cost too much. They claim it makes more sense to build more electric plants than to conserve power. More progressive states are focusing on conservation, and the U.S. Energy Department estimates that new natural gas generation costs twice as much as energy efficiency programs. It's no surprise that the utilities reject that math and claim they would be saving consumers money by reducing conservation measures and increasing demand for power.

In Florida, to borrow an old state slogan, the rules are different. This is a state where the Legislature allowed utilities to bill customers in advance for nuclear plant construction that would never generate a kilowatt of power. Now Duke Energy customers will pay more than $3 billion for a botched repair at the Crystal River nuclear plant that is shut down and for a new Levy County nuclear plant that will not be built. The PSC signed off on a one-sided settlement, and the Legislature rejected calls to repeal the 2006 law and made only minor adjustments.

This is a state where the electric utilities have done everything they can to thwart the development of solar power. They argue renewable energy costs too much and oppose leveling the playing field for independent companies that would generate solar power and sell it back to the power companies. Even without a smart state energy policy, solar costs are declining and there are success stories such as Great Bay Distributors, which is building the largest private solar power system in the state on the roof of its new St. Petersburg headquarters.

And this is a state where the PSC is listening only to utility companies and is likely to reduce energy conservation goals. All five PSC members were appointed or reappointed by former Gov. Charlie Crist and reappointed by Gov. Rick Scott. Crist, the former Republican turned Democrat, is likely to face the Republican incumbent in November. Two of Crist's consumer-oriented appointees to the PSC were not confirmed by the Senate, and as governor he sought delays in large rate increases. Scott's political committee has received more than $550,000 from FPL, and Crist's has not received a nickel from them.

Which candidate for governor is more likely to stand up to the electric utilities and push for a smarter energy policy that emphasizes conservation and renewable energy over building more power plants?

This editorial has been adjusted to reflect the following clarification: While the public cannot participate in Florida Public Service Commission hearings on energy efficiency, environmental groups and other parties to the docket can testify and provide evidence. An editorial published Wednesday was unclear on that point.

Editorial: In Florida, utilities call the shots 07/22/14 [Last modified: Wednesday, July 23, 2014 3:50pm]

4 comments:

Anonymous said...

Are you "off the grid"?

M

Gimleteye said...

I'm not sure that comment has anything to do with anything. Providing reliable, on demand electricity is the central purpose of electric utilities. What's the point of your question?

Anonymous said...

The only recourse will be found in the courts.

friv said...

Oh yeah! I agree with the idea that there is a coincidence.