Wednesday, December 20, 2006

The Point Beach Indicator

Wisconsin Energy announces their intent to sell Point Beach Nuclear Power Plant to Florida based FPL Energy and the Citizens Utility Board immediately reacts with reflexive outrage. Kind of like how a jolt of electricity can cause a knee to jerk.

Point Beach Nuclear Power Plant Should Not Be Sold: Power plants not owned by regulated utilities are able to make huge profits in Midwest electricity markets. If the sale of Point Beach is approved, a large power plant will no longer be owned by a power company regulated by the PSC: FPL Energy would not have to return excess profits to ratepayers, as is the case for power plants owned by regulated utilities.

In addition to higher costs for ratepayers, the State of Wisconsin will lose jurisdiction over what is arguably the state’s most polluting industrial operation: Point Beach produces thousands of pounds of radioactive wastes every year, for which there are no safe means of disposal. FPL Energy could run the plant to maximize profits instead of safety.

Let’s do a quick checklist of the evils. Profits (huge, excessive and maximized) – yes, yes and yes. Profits over safety – yes. Reduced government jurisdiction over rates – check. Reduced government jurisdiction over pollution – absolutely. This is a socialist nightmare scenario which CUB must vehemently oppose. FPL Energy on the other hand envisions a normal business transaction where assets are voluntarily transferred from private owner to private owner and legal contracts are honored.

Press Release: Under the terms of the agreement, a wholly-owned subsidiary of FPL Energy will purchase the Point Beach Nuclear Power Plant for a total of approximately $998 million, including nuclear fuel, inventory and other items. The $998 million price represents $783 million for the plant itself and $215 million for fuel, inventory and other items.

All of the power from the Point Beach Nuclear Power Plant will be sold under a long-term contract to We Energies through the current NRC license terms of 2030 for Unit 1 and 2033 for Unit 2. The power from Point Beach is competitively priced and escalates each year of the contract.

FPL Energy has agreed to retain non-bargaining unit employees at Point Beach at comparable wages and benefits for 18 months following the close of the sale. In addition, FPL Energy will honor all labor agreements for bargaining unit employees.

Uh, CUB - aren't the rates fixed for the next quarter of a century? This will be a telling example of the direction newly re-elected Governor Jim Doyle will take the state. His environmentalist supporters will want him to manipulate the Public Service Commission like it was the State Election Board. Someone should let FPL Energy know there is still time to write that $50,000 check for the second term inauguration extravaganza. Money can still buy you gov’y love in Wisconsin.