December 11, 2017 Read More →

U.S. Utilities, in Old-School Expansion Spree, Put Customers on the Hook for $40 Billion

Charleston Post and Courier:

Over the past decade, state legislatures across the country rewrote rule books for how power companies pay for new power plants, shifting financial risks away from electric companies to you and everyone else.

This rule change ignited a bonfire of risky spending — $40 billion so far on new power plants and upgrades, a Post and Courier investigation found.

Flush with your cash, utilities tried to build plants with unproven technology; they launched projects with unfinished designs and unrealistic budgets; they misled regulators and the public with schedules that promised bogus completion dates; they hid damning reports from investors and the public; they tried to silence critics and whistleblowers.

Then, when delays and cost overruns couldn’t be ignored, they asked state regulators to charge you more for their failures.

And what happened to these high-stakes gamblers?

Over the past five years, executive teams of six utilities that bet on these plants won $520 million in salaries, bonuses and other personal compensation, the newspaper found.

For this story, a Post and Courier team of reporters interviewed more than 50 industry experts, utility and construction insiders, whistleblowers and others, as well as lawmakers from states that opened the doors to these risk-shifting laws. Reporters pored through tens of thousands of pages of reports, government filings and other documents.

The result is a tale about power — political and electric. It’s about how an industry helped change rules so it could make big bets with your money.

These bets include the now well-documented boondoggle in South Carolina — the V.C. Summer nuclear expansion — $9 billion sunk into two abandoned reactors that may never produce enough juice to run a nightlight.

But they also involve bets on clean coal plants in Mississippi and Indiana.

And nuclear reactors in Georgia.

And projects in Florida and North Carolina that never got off the ground but still cost customers billions of dollars.

These rule changes largely flew under the public’s radar as industry insiders worked elbow-to-elbow with lawmakers to craft laws with obscure acronyms and benign language such as “advanced cost recovery.”

But the results are as plain as the extra money you pay on your power bill, the fewer dollars you have for groceries.

They are as real as the tuition increases at Mississippi universities because of higher power bills.

As painful as the money schools in Georgia forgo for teachers and lesson plans.

More: Power Failure: How utilities across the U.S. changed the rules to make big bets with your money

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