Photo credit:
With the holidays upon us, Georgia Power — or should we call it “Grinch Power” to reflect the spirit of the season? — is hoping that everyone is distracted and unaware of an
enormous decision before the Georgia Public Service Commission (PSC).On Dec. 20, the PSC commissioners — they’re the elected officials who decide how much you pay to heat your home and turn on the lights — will decide if Georgia Power and their shareholders are “naughty or nice” as it relates to the extremely delayed nuclear reactors currently under construction at Plant Vogtle along the Savannah River in Burke County. Will utility customers find sweet candy canes in their stockings? Or deadly, spent nuclear fuel rods à la Homer Simpson this holiday season?On Dec. 6, the PSC held a
single public hearing over whether ratepayers should be on the hook for the project’s cost overruns. According to the
Atlanta Journal-Constitution, that bill could be hundreds of millions of dollars more than the PSC’s own staff initially thought people should cover. Headlines before and after the hearing suggest a disappointing holiday is in store for Georgia Power customers:
“That’s not a candy cane Georgia Power’s handing us” and
“Hearing reveals PSC cave-in to Ga. Power.”How did this happen?About a decade ago, several Georgia utilities (Southern Company subsidiary Georgia Power, Oglethorpe Power, MEAG, and Dalton Utilities) decided to build two Toshiba-Westinghouse AP1000 reactors, an untested design that has still yet to operate anywhere in the world. Georgia Power claimed there wouldn’t be the same problems that plagued the nuclear power industry previously.But the so-called “nuclear renaissance” with more than 30 new reactors originally proposed has now fizzled. Only four are under construction: two at Vogtle and two at SCANA’s V.C. Summer in South Carolina. Both are delayed and billions over budget. The original Vogtle estimate of $14 billion has risen to almost $22 billion.Seven years into the project, construction is only 36 percent complete and, according to Georgia Power, 39 months behind schedule. PSC experts say even more delays are extremely likely. It’s fittingly ironic that the first new reactor was supposed to have been operational this year on
April Fool’s Day. Persistent engineering and construction problems have driven up costs and nullified utility and nuclear industry claims that building new reactors would be easier and more cost-effective than in the past.Anti-consumer legislation passed by the Georgia General Assembly in 2009 helped make this debacle possible. Senate Bill 31, “Georgia’s Nuclear Energy Financing Act,” allows Georgia Power to charge their customers in advance for the new reactors’ financing costs. The charge, often referred to as “Construction Work in Progress” or “CWIP,” is visible on ratepayers’ bills. “Corporate Welfare in Progress” is more apt.Consumers were promised this financing would save them money, but it hasn’t. Since 2011, more than $1.8 billion has been collected from ratepayers. Georgia Power is actually considering building even more water-guzzling, costly reactors, potentially in
Stewart County along the Chattahoochee River, and ratepayers should ask their state legislators to repeal this pre-payment deal scam before it’s too late.What is the PSC considering on Dec. 20?In October, Georgia Power and the PSC Staff agreed to a
controversial settlement that fails to provide enough protections to customers for billions of dollars in increased project costs. If the settlement is approved, utility ratepayers are guaranteed to pay billions of dollars more for the new Vogtle reactors than they were originally promised.That’s not the only thing. First, the purported $325 million in cost savings to customers over the next four years only includes $115 million in actual savings. The remaining phantom cost reductions consist of $70 million in taxes not paid by Georgia Power and $139 million in deferred financing payments.Second, the settlement rewards Southern Company and its contractors’ construction delays and cost increases. Ratepayers will shoulder an additional $2.2 billion for the project while Georgia Power’s shareholders still make out like bandits, earning just $115 million less than they would have.Third, while Georgia Power has spent $3.68 billion thus far, the settlement certifies $5.68 billion in construction costs as “prudent” and “reasonable” — essentially pre-approval of $2 billion despite no review being conducted.And finally, there is no public record to evaluate whether the PSC staff negotiated a fair deal or rolled over to Georgia Power’s demand, and there is no guarantee that a thorough financial review will ever be conducted in the future.Thankfully there are ways to thwart Georgia Power — excuse me, Grinch Power — and ensure a happy holiday season for all of us in Whoville.The PSC can reject the settlement or at least provide stronger consumer protections. And the General Assembly can correct its mistake in passing SB 31 by repealing the “Corporate Welfare in Progress” law. Who knows? Maybe that’s just what they’ll do if they hear from you!
You can help.
Sara Barczak is the High Risk Energy Choices Program Director at the Southern Alliance for Clean Energy, or SACE.