Dive Summary:
- Rather than building a plant first and collecting costs from ratepayers later, Duke Energy’s CEO Lynn Good is pushing for electricity customers to pay for the project in intervals as its being constructed.
- Pay-as-you-go billing for plant construction may cut overall costs because starting payments early in the multiyear building process reduces financing costs and the overall bill customers will pay, proponents say.
- But only 10 states, including South Carolina and Florida, allow utilities the pay-as-you-go method, and only for nuclear plants and other large projects. As Good lobbies for regulatory change, the CEO will no doubt encounter resistance to the pay-as-you go approach which shifts the risks of failed plant construction to ratepayers.
From the article:
“Duke Energy decided in February to close the damaged Crystal River plant, allowing it the possibility to earn a $50 million profit on the $500 million that customers already paid. Florida customers also paid $1.5 billion for the Levy plant. Duke could earn $150 million if that project is not built.”