The bad news for consumers is a new system means tens of millions of more dollars in construction costs - costs that could actually benefit WE Energies. Here's the take:
Either way, WE wins. They have a bigger win if the system is ordered to be updated (I heard they actually want to lose this case.) If they have to change the water intake system, then it means more capital costs, which means more dollar investment in their lease-back financial set-up 'scheme,' which means, in turn, means a higher capital cost times the 12.5% guaranteed return on investment, which means more profit, which means higher stock price, higher dividends, and, yes, you guessed it, higher rates.
The more they spend, the more they make, the more we pay.
Yikes.
And of course if not for evil We Engeris the elfs would have created a free system with bunnies and puppies.
ReplyDeleteIt costs MILLIONS to build a plant of course it will be the users of the power that pay for it.
Just think how much more a Gas powered plant would have costs of course a nuke plant would be the best long term idea but the nut cases would never let that happen.
So...if this is what they wanted, why didn't they propose it in the first place? They built it at Pleasant Prairie, so they know what it is. They were asked to do it repeatedly by opponents. They had ample opportunities. Your logic just doesn't hold any water. Maybe, just maybe, they didn't want to burn the extra coal, which means extra emissions and extra trains. Congrats to the enviros, all of our bills just went up and the plant will not emit 10% more CO2, mercury, SOx, and NOx. It was truly a great environmental victory.
ReplyDeleteColt:
ReplyDeleteYou are correct. It does take millions of dollars to build coal plants. In this case, the incentive for We Energies is to maximize the number of millions of dollars. Under law, they make their profit based on thier capital investment and that is ultimately paid by the end-user.
I do not believe that this should be compared with other types of generating plants (gas, nuke.) What We Energies did was scheme for the most expensive type of plan they could slide by the PSC without political suiciide. Did anyone really think that the PSC vote would not be 2-1?
All people talked about was coal vs. gas. At the same time, We Energies sets up holding company to lease the new plant to itself, generating hundreds of millions in long-term profits for itself. This change in organizational structure had nothing to with building the plants, but the rate payer had to pay it.
The PSC then says "We're uncomfortable with the lease deal, but, oh heck, we'll approve it anyway."
And to Anon:
I agree with you, too. It was, at this point in time, a great environmental victory. Kudos to Clean Wisconsin. But, at this point in time, it also makes financial sense for We Energies.
First, they had to do it in Kenosha County. There is no lake there. Secondly, it was not "sellable" during the first go-around (would have raised the price too much and bring up rate increase concerns.)
Their stategy was to get the two plants approved by the corrupt PSC and at that time they even put a limit on the cost overruns. How nice of them. And the PSC saves some face, too. Look at the fine print and the cost overrun clause does not include these type of changes. Remember the way the PSC works: Ask and ye shall recieve.
So now they have spent capital (making their profit) on the lake intake system, and now they will have to scrap that and spend even more capital (and make more guaranteed profit) on the towers.
How does We Energies lose here? They win. They win big time. They could care less about the amount of coal they burn. The consumer pays for it. All of it.
Yes, it is better for the environment and that is a very good thing. There is no doubt about that. But, the entire project could have been done at a much lower cost.
Under their corporate charter, they have but one obligation. That is to maximize the profits to their shareholders. Kudos to We Energies for doing that for their sharholders. (sarcasim intended.)
When will the people of this country wake up, get rid of the corporate personhood laws and start revoking the corporate charters of the corporations that harm the public with their actions in the name of federal-law charter-directed, excess profits? (Probably never, since it is the money from these very corporations who have bought and paid for our political system.) Wake up, America!