On Monday, the El Paso Times ran a story about the city’s rolling blackouts during last weekend’s snowstorm in Texas. Somewhere down around the 16th paragraph was this assessment of why El Paso did not have sufficient capacity to keep the whole city up and running:
…Larry Francis, who was El Paso’s mayor from 1993 to 1997 … said El Paso Electric’s current problems are an offshoot of the moves the company made in the 1980s when it decided to invest in the Palo Verde nuclear power plant in Arizona.
Then things started to go bad:
After buying a 15 percent interest in the nuclear power plant, El Paso Electric sold 7 percent of its interest so that it could have some capital to invest and diversify, according to archives.
The company used the money to buy a savings and loan, a lighting company and several buildings in Downtown El Paso. The electric company established the Franklin Land and Resource Co. and PasoTex.
The goal of both companies was to generate a profit, which would allow the utility to keep its electric rates low.
But before the commercial investments could make a profit, the cost for Palo Verde ballooned from several hundred million to $1.5 billion. Unable to pay its debt, the utility sold off its commercial investments at a loss and filed for bankruptcy.
Nuclear power can drag down utilities, and has. Google Washington Public Power Supply System, and you can get the details of how nuclear power led to the largest municipal bond default in history.
Here’s the link for the El Paso Times story: