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By Kris FitzPatrick, Staff Editor
Electric companies are like umpires - we never notice them unless they mess up. Barring an extended power outage or extreme rate hike, we simply turn the lights on, pay our bill each month, and ignore how these companies actually get the job done. The reality is that the major utility companies are massive and make capital investments unlike those in any other industry. Construction of a new power plant, which will run for upwards of forty years, can easily stretch into the billions of dollars.
Reading recent news about the Duke Energy-Progress Energy merger, North Carolinians are beginning to comprehend the scale of these businesses. As my SJPP colleague, Dan Jasper, pointed out last week, the merger would create the largest utility in the United States. Bill Johnson, the current CEO of Progress and would-be CEO of the new Duke Energy, has said publicly that the merger is largely about raising the necessary capital to build new nuclear power plants. The U.S. Energy Information Administration projects a typical nuclear plant will today cost in excess of $5 billion, and many experts place it closer to $10 billion.
In the electric industry, even maintenance is a high stakes endeavor. A St. Petersburg Times piece earlier this month detailed a repair at Progress Energy’s Crystal River nuclear plant that went horribly awry. The Florida Public Service Commission is investigating the case, but it is already clear that a questionable managerial decision led to a $2.5 billion mistake and that Florida ratepayers will have to pick up a big chunk of the tab.
The electric utility business is regulated in North Carolina, which means that utilities have a monopoly in their service territory and customers cannot influence investment decisions with their dollars. Instead, customers rely on state regulators to protect their interests. But with utility companies growing larger and making decisions that will last a generation, it seems fair to ask whether customers deserve a greater say in the matter.