Controversial Former Progress Energy CEO Appointed to Head TVA [View all]

[bananas]

http://blog.cleanenergy.org/2012/11/05/controversial-former-progress-energy-ceo-appointed-to-head-tva/

Controversial Former Progress Energy CEO Appointed to Head TVA

November 5th, 2012 › Clean Energy, Utilities › Dr. Stephen A. Smith ›

Today’s appointment of former Progress Energy CEO William Johnson as the new CEO of the Tennessee Valley Authority (TVA) is raising the eyebrows of clean energy advocates across the region, including here at SACE. Though willing to maintain an open mind, I’m surprised that TVA’s Board would hire Mr. Johnson with his controversial past.

Of course, I’m referring to the sudden removal of Johnson by the Duke Energy Board in July just hours after his appointment as CEO of the company following the merger with Progress Energy. This highly unusual series of events sent shockwaves through the utility industry, setting off regulatory hearings and triggering considerable back and forth between the two companies. While we may never know the full story of why Johnson was so abruptly dismissed, there are some known facts which would make one question whether or not he is the best fit to lead TVA.

Under Johnson’s leadership, Progress Energy Florida (PEF) chose to self-manage an upgrade project at its troubled Crystal River 3 (CR3) nuclear reactor located north of Tampa, FL as opposed to bringing in outside experts. Progress chose a “do it yourself” approach to a complex steam generator upgrade that led to major cracks in the containment vessel. Progress Energy’s attempts to repair the cracks have led to further damage to the containment structure. Duke Energy had such a lack of confidence in the numbers that Progress Energy reported, the utility commissioned an independent report itself to evaluate the costs, which was recently released to the Florida Public Service Commission — you can find the full report here.

The reactor has been offline since September 2009 and, if successfully repaired, will cost at least $1.5 billion to repair and won’t be back in service until 2016. Customers are already paying $300 million per year for replacement power. The critically damaged reactor is now commonly referred to as the “Humpty Dumpty” reactor. Johnson oversaw the company’s failed decision to “self-manage” the steam generator upgrade, rather than have experienced vendors execute the upgrade. He has been accused of failing to communicate the seriousness of the reactor’s problems leading up to the Duke-Progress merger, low balling the cost to make needed repairs and doggedly wanting to repair the reactor despite mounting evidence that shutting it down may be the better fiscal decision for ratepayers in Florida.

<snip>