Thursday, March 24, 2016

NextEra Energy and FPL: Hiding Big Questions On Turkey Point From Investors ... by gimleteye

Utility investors ought to pay more attention, especially when it comes to NextEra Energy and its principal business unit, Florida Power and Light. In its 2015 corporate responsibility report, NextEra CEO Jim Robo wrote, "At NextEra Energy, sustainability is a big part of who we are and what we do, and we prove it every day. In 2014, we generated more electricity from the wind and sun than any other company in the world. Yet that accomplishment doesn’t begin to tell the whole story of sustainability and corporate responsibility at NextEra Energy."

No, in fact the whole story would include how Florida Power and Light has throttled the adoption of solar energy, by commandeering the state's Public Utilities Commission. In April, 2015 the Florida Center for Investigative Reporting wrote, "In Sunshine State, Big Energy Blocks Solar Power".:
“Why don’t we have a bigger solar industry in Florida?” asked Mike Antheil, a West Palm Beach lobbyist who represents solar companies. “The answer is simple. Every kilowatt of solar you produce on your roof is one less kilowatt that the utilities can sell you.”

The state’s largest utilities declined to comment on specific questions related to this article...

Only a small portion of the $12 million spent since 2010 by electric companies on political campaigns went directly to candidates. Instead, most of the utility money went to political action committees and political parties.

Half of the money, $6.68 million, went to the Republican Party of Florida. The second-largest recipient of electric company money, the Florida Democratic Party, took in $1.8 million.

Donations of this type allow the utilities to avoid state campaign contribution limits, which cap donations to Florida legislative candidates at $1,000 per election cycle.

Conservative political action committees top the list of those receiving contributions, with the Florida Conservative Majority, Freedom First Committee, and House Republican Campaign Committee all receiving over six figures each from the utilities.

Among the politicians who have received power company money, Gov. Scott tops the list. The utilities gave $15,444 directly to Scott’s campaign fund. They also gave $600,000 to Scott’s Let Get to Work PAC. The utilities handed another $670,000 to the RGA Florida PAC, which in turn gave $500,000 to the Let’s Get to Work PAC. That puts the electric company contributions to Scott, both directly and indirectly, at $1.1 million.

In the Legislature, all 16 state senators and representatives who make up the legislative leadership have received utility money. In total, they have pulled in more than $200,000 from utilities and their interest groups.

Those donations to the leadership allow the power companies to keep pro-solar bills from getting anywhere, said state Rep. Dwight Dudley, D-St. Petersburg, a supporter of the rooftop solar industry.

“We in Florida are stuck in the stone age. This is probably the most byzantine energy legislation in the country,” Dudley said. Dudley has filed legislation that would have increased renewable energy in the state, including solar, but none of his ideas have made it to the House floor.

Taking on the utilities has made him an outcast, Dudley said. He was talking with an acquaintance at an event last year in St. Petersburg when a utility lobbyist walked up and said, “Oh my gosh, do you know who this is? The devil’s holy man,” Dudley recalled. “It was loud and unpleasant, and it became very uncomfortable.” ...

Florida regulators that oversee power companies have been far from allies of rooftop solar power. The Public Service Commission has set the rate that utilities buy excess rooftop solar at two to three cents per kilowatt hour. In 13 states, utilities must pay the rate at which they sell power, which in Florida is about 12 cents per kilowatt hour for homeowners. In November, the commission voted to end the solar rebate program at the end of the year and slash energy efficiency goals.

Former state Rep. Jimmy Patronis is now on the regulatory board that oversees energy in Florida. He has also been listed as ALEC’s state chair.

“Solar power works now. It’s not 10 years from now. It’s not five years from now. It’s now,” said Scott McIntyre, CEO of Solar Energy Management in Tampa, which just completed a $2.6 million solar project expected to pay for itself in about six years. “We just need the state to get out of its way and allow solar power to grow.”

In November, the state’s Public Service Commission voted to end the state’s solar rebate program at the end of 2015 and to slash energy efficiency goals by 90 percent. That vote came at the requests of the utility companies, which argued the rebates and goals were not cost effective. In December 2014, the commission gave Florida Power & Light permission to collect $191 million from customers and use the money to enter the controversial fracking industry with a natural gas venture in Oklahoma.

The Public Service Commission has hampered the solar industry in Florida by setting the rate that utilities buy excess power produced by rooftop solar systems among the lowest in the country. The Public Service Commission has also been under fire for being too cozy with utilities. In September, Scott appointed Patronis, the former state representative and a Panama City restaurateur, to the Public Service Commission. While in the Legislature, Patronis accepted $5,200 from power companies and filed a bill to weaken carbon pollution limits on power plants. Since 2009, Patronis has been listed as the state chair of ALEC.

In contrast, a March 7, 2016 PR statement touts: "NextEra Energy once again recognized as a World's Most Ethical Company®" the company crowed in a recent press statement: "JUNO BEACH, Fla., March 7, 2016 /PRNewswire/ -- NextEra Energy, Inc. (NYSE: NEE) today announced that it has been named a World's Most Ethical Company® for the ninth time by the Ethisphere Institute, the global leader in defining and advancing the standards of ethical business practices."

EOM has pointed out in the past how FPL meddled in local elections, used under-handed attempts with a PAC it funded in an attempt to unseat South Miami Mayor Philip Stoddard, how FPL has steamrollered the Miami-Dade County Commission on numerous land use issues related to its Turkey Point nuclear facility, how FPL has dodged -- over many years -- accountability for the failed cooling canal system there, how FPL pushed aside critics of existing and planned new nuclear reactors at Turkey Point.

Investors have to read the fine print legal disclaimers to find any keyhole into the deep issues about FPL's financial viability over the long-term. NextEra Energy legal disclaimers are routinely attached to communications required by the Securities Exchange Commission (SEC) and normally, investors just skip by them.

If investors did pay attention, there are enormous liabilities undisclosed in corporate reports piling high as cooling towers right now. The Miami Herald, normally willing to give FPL the benefit of the doubt, finally jumped on the issue on March 22, 2016: "The cooling canal system at Florida Power & Light’s Turkey Point nuclear plant are under increasing scrutiny for leaking into surrounding Biscayne Bay and groundwater, Jenny Staletovich And David Smiley".
During a press conference in front of Miami City Hall Tuesday morning, leaders of the two environmental groups and state Rep. José Javier Rodríguez, D-Miami, criticized state environmental regulators for sitting as evidence has built that FPL has failed to contain contaminants at its Turkey Point facility.

Rodríguez said he’s received some response from county and environmental authorities, but state regulators “appear to do FPL’s bidding” even as the utility seeks steep rate hikes from the Legislature.

“What’s happening at Turkey Point is a real danger to us, to our water supply,” he said. “The fact that there is salt being dumped into the aquifer and the fact that there are contaminants in Biscayne Bay really should have sounded an alarm. But as of yet, we’re still waiting for state regulators to step up.”

The same day, the New York Times published, "Nuclear Plant Leak Threatens Drinking Water Wells in Florida, by Lizette Alvarez".
Environmentalists, who have waged a longtime battle over water quality with the power company, among the largest in the country, said Tuesday that they planned to sue Florida Power & Light in 60 days for violating the federal Clean Water Act unless it addressed the problem.

The company has faced criticism and scrutiny from a judge and Miami-Dade County officials who said it was slow to react to the changes in water quality after the company overhauled Turkey Point in 2013 to increase its energy output. The plant, whose canals are filled with extremely hot water, was built on Florida limestone, which is highly porous.

“We now know exactly where the pollution is coming from, and we have a tracer that shows it’s in the national park,” said Laura Reynolds, an environmental consultant who is working with the Tropical Audubon Society and the Southern Alliance for Clean Energy, which intend to file the lawsuit. “We are worried about the marine life there and the future of Biscayne Bay.”

At a news conference on Tuesday, José Javier Rodríguez, a Democratic member of the Florida House, called on the federal government to intervene. He said state regulators had failed to adequately enforce the law and had shied from forcing the politically influential energy company to address a problem it had long ignored. The power company has not been cited for any violation by the state.

In the meantime, the Nuclear Regulatory Commission is reviewing its 2008 decision to allow FPL to increase its energy output at the two reactors at Turkey Point and the contention by a local civic group, CASE, that agency staff ignored or failed to examine significant issues related to the failed cooling canal system that are substantially contributing to the costly fiasco unfolding at Turkey Point.

None of this news appears anywhere in NEE disclosures to investors. One has to riffle to the back pages and small print to find disclaimers that anticipate risk, including the risk that the corporation's insurance policies may -- in the future -- not be sufficient to protect investors.

The point is that NextEra and FPL are engaged in an uncontrolled experiment on the water supply and environment affecting people and natural resources, including a national park, and have been for a very long time. They have either denied or avoided public disclosure as a matter of deliberate corporate policy, undisclosed to investors. The corporation has rebuffed state regulators over decades and frustrated environmental critics who could not find a way -- either through the state water management district, through the state environmental protection agency, or local county government -- to hold FPL accountable to its legal binding agreements to operate the cooling canal system in a safe manner.

To read between the lines of FPL's official statements to investors, regulatory failure has been a good thing, because the only thing that really matters -- leaving aside the matter of "the world's most ethical company" -- is next quarter's profits.

And we haven't even gotten to the issue of sea level rise. More on that, coming.


Anonymous said...

What is the history of FPL's influence/ownership of the GOP and Florida legislature? If you go back to 1980s when FPL began its stranglehold on power. Fla. Stat. 366.02 which forbids leasing and resale and really sharing of generated power got support from Dems as well. How did we get to this situation? It has a long unknown history. Anyone know where this history is summarized?

Anonymous said...

Far from being good corporate citizen, looks like Florida is NEE's cash cow and they are milking the state and (us) ratepayers, hard as they can.

Anonymous said...

I confess to being a former FPL sympathizer. Before the revelations that Turkey Point operations are fouling our drinking water and contaminating our National Park, I thought nuclear energy was by definition clean energy (even though spent fuel rods are a bit of a forever nuisance). But the truth is, FPL is a corporate pig run amuck in Tallahassee and in County Hall. They use unskilled cheap labor to do electrical work at MIA, they have attacked individuals who speak out against them, and they could care less about the damage they are doing to our South Florida water supply. Count me in on all future anti-FPL efforts. Screw them.

Alexandria said...

FPL is a regulated PONZI SCHEME period. They have been paying 20% returns to investors 13 years running. They stopped having their yearly meeting in Juno Beach Florida because they couldn't face protestors. They will be the next Enron. Sadly the feds are slow to investigate and convict crooks like FPL. Turkey Point has been compromised since Andrew (1992). Maintenance is duct tape and toothpicks. They have been taking money for Operations & Maintenance and putting it in their pockets. They blame the failures on squirrels. I hope karma gets the execs @ FPL before Turkey Point kills anyone within 100 miles. The mantra needs to be SHUT DOWN Turkey Point no more pussyfooting around saying please.

Anonymous said...

Cancer cluster study within the Turkey Point radius should be done.