Pigs fly, and I side with the utilities
By HOWARD TROXLER
Published March 4, 2007
Did you ever drive past the power plant at Crystal River, going up U.S. 19?
You can't see much from flat land. But a little north of town the road narrows to two lanes over a high, arching bridge.
Look back to the west then and you can see the giant twin cooling towers, and the plumes of steam rising into the air.
There's a nuclear plant at Crystal River that gets most of the press, but there also are coal-fired units there, and they are our subject today.
There's a big fight going on over whether Progress Energy Florida cost its customers money by buying coal for Crystal River that was too expensive.
Instead of using cheaper coal sources from 1996-2005, the accusation goes, Progress kept buying pricier coal through other Progress-related companies - scratching its own back, as it were.
According to the public's lawyer, the Office of Public Counsel, the customers are owed $134.5-million, plus $19-million interest. A refund of that size would wipe out roughly half of Progress' net income in Florida last year.
Progress makes several answers to this accusation:
(1) It's not true. The Office of Public Counsel has wrongly calculated the coal costs.
(2) You can't reach back in time to say, "The other way turned out to be cheaper, even if you didn't know it at the time, so you owe us money."
(3) You can't burn the cheaper coal fast enough to get the same bang for the buck. Even running at the max, with the other coal, Crystal River would be losing 100 megawatts of output.
(4) Look, we went through 14 fuel-cost hearings over 10 years' time, and at any time you guys could have brought up these questions.
Buddy Eller, a spokesman for Progress, calls the case "Monday-morning quarterbacking at its worst, and a decade late."
Joseph A. McGlothlin is the associate public counsel on the case. He argues that Progress knew perfectly well at the time it could have bought less-expensive coal.
"We're not asking the Public Service Commission to employ hindsight," McGlothlin said.
Generally I am sympathetic to the public counsel - the office usually is outgunned and outmatched in fighting utility cases.
And any time there is evidence of fraud, deceit, error or deliberate wrongdoing by the electric company, we ought to be able to reach back into the past to seek justice.
But that's not the allegation here. The public's lawyer simply wants to reopen a decade's worth of fuel charges that we had the opportunity to challenge along the way.
The public counsel faults Progress for giving up the right to burn the cheaper coal when it got a new federal permit in 1996. Why didn't anyone object then?
Nobody has gigged the PSC or the electric company more than I have over the years, so this is weird to say, but:
Seems to me Progress' investors are entitled to a stable regulatory environment, not one in which the books of decades past can be thrown back open at any time. So if I were a commissioner, I would rule for Progress on that issue alone. Man bites dog! Say it ain't so!
Howard Troxler now has a blog for updates, observations and reader comments. Check it out at www.tampbay.com by clicking on the "Blogs" link, or at the Web address blogs.tampabay.com/troxler.