Monday, March 4, 2013

The Benefits of the Government Franchise

The 860 MW Crystal River nuclear plant in Florida, owned by Progress Energy, has not operated since 2009 when an effort to upgrade the plant's steam turbines cracked the reactor's containment building. For some reason, Duke Energy decided to buy Progress Energy, but found that it would cost $3 billion and 8 years to fix it. At that price they could build more than 3,000 megawatts of new, gas-fired electricity generation. Consequently, Duke Energy has decided to close Crystal River permanently.

The costs of closing Crystal River will be huge--$4 billion is one estimate--and include plant decommissioning expense as well as the cost of buying power to replace the electricity not generated by the nuke. Even though the plant has not been producing power for nearly 4 years and never will again, the captive ratepayers in Florida are likely to pay most of the bill.

Those that will suffer are not the businessmen who made the mistake or the shareholders who elected them; it will be the electric users locked in to an energy monopoly.

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