OT: Should Customers or Stockholders Pay?

The nuke plant near me has applied for and reportedly will receive a license to build a new reactor. It is reported that $600 million was spent for "project development and preliminary construction". But there is no commitment by the utility to actually build the $19 billion reactor. The Virginia Attorney-General's Office called for the abandonment of the project because of the cost burden on consumers. Consumer groups have also called for the reactor plans to be abandoned.

My question is who should pay for the planning of a reactor that may never be built? I read that about half the $600 million in costs has already been billed to consumers and the utility indicates the will seek permission to bill the remainder to consumers as well. In the various fields I have worked, this sort of research and development would be part of the company's investment coming directly out of profits.

As to the expense of the new reactor, this is not a prohibition to the utility. Just the opposite. The profits of a public utility are based on their capital investment. Building a large, expensive reactor will allow them to increase their profits, with the capital expenditure paid by the consumers without regard to the needs of consumers.

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Rick C
Reply to
rickman
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If it's built, should the rate-payers be charged for electricity produced from (fill in you fossil fuel here) and any excess be paid to the stock holders?

Reply to
krw

Stakeholders would be surprised and offended if you told them you thought it was abnormal for them to want to offload the cost of a poor investment onto consumers, because that's how the game is played. Kind of like a marriage, you are going to pay for it, buddy boy, one way or the other.

"Risk" is not the game they're interested in playing, nor adhering to some set of arbitrary standards of equitable behavior designed for people who aren't them.

Reply to
bitrex

Are you talking about shareholders in a conventional company where customers are willing (and *all* costs come out of profit), or legal monopolies where profit is controlled?

I'm not a shareholder. Do I care? Utilities are regulated. It's not up to the shareholders how they are regulated. They only get to buy the stock or sell it.

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Rick C
Reply to
rickman

Very one-dimensional. Those regulations exist because stockholders, or corporations, or the public, had a vested interest in that outcome. "Free market" includes politics, and politicians aren't terribly expensive. ;-)

Tim

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Seven Transistor Labs, LLC 
Electrical Engineering Consultation and Contract Design 
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Reply to
Tim Williams

Consumers/stockholders allthesame as both will pay (or else no power).

Reply to
Robert Baer

There is no such thing as a "free market"..

Reply to
Robert Baer

There's way more evidence for the existence of anthropogenic global warming than there ever was for an "invisible hand", yet some treat the latter as if it were some kind of God-given truth.

Reply to
bitrex

So if Dominion doesn't spend $600 million on licensing a reactor they might not build the lights will go out?

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Rick C
Reply to
rickman

To be perfectly precise, it should've never been called that, but the "priced market" instead, perhaps. :-)

Tim

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Seven Transistor Labs, LLC 
Electrical Engineering Consultation and Contract Design 
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Reply to
Tim Williams

As they say, "Free as in 'free speech', not as in 'free beer'.".

Reply to
krw

If they're forced to absorb the cost, that very well could happen.

Reply to
krw

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