Another reason Georgia and Georgia Power Company SUX!

Attorney General: Customers must pay Plant Vogtle charges up front

Russell Grantham The Atlanta Journal-Constitution
1:59 p.m Thursday, July 6, 2017

One of the Plant Vogtle reactors under construction. Photo: Georgia Power
To AJC Story

Customers must keep paying a financing surcharge for the troubled Plant Vogtle nuclear project, according to the Georgia Attorney General’s office.

Georgia Power has collected more than $2 billion in such finance charges from customers since 2011, according to Bobby Baker, a former state utility regulator and Atlanta attorney.

Because of a 2009 state law enacted just after the Vogtle project was authorized, “Georgia Power cannot voluntarily agree” to suspend the surcharges, Senior Assistant Attorney General Daniel Walsh said Wednesday in a letter to state utility regulators.

Atlanta-based Georgia Power, the largest partner in the project, previously said it has no intention to agree to stop collecting the surcharge, which adds roughly $100 a year to the typical residential customer’s bill.

However, the surcharge can apparently be adjusted or frozen at a reduced level.

Georgia Power agreed to cap the surcharge last year in a settlement with the Georgia Public Service Commission.

Under that Oct. 20 settlement, the amount of Vogtle construction costs the finance charge is based upon was capped at $4.4 billion until the project is completed, in effect freezing the amount Georgia Power can collect each year in finance charges.

Georgia Power spokesman Jacob Hawkins said state law requires the company to collect the surcharge, but he declined to answer a question about whether the law allows it to reduce the surcharge. Hawkins said the surcharge “saves customers hundreds of millions of dollars by reducing financing and borrowing costs.”

The opinion from the Attorney General’s office does not appear to address whether the surcharge can be reduced.

Lauren “Bubba” McDonald, on the Georgia Public Service Commission’s five-member board, raised the surcharge issue last month when he proposed that the PSC ask the Atlanta utility to quit collecting the financing charge.

The late-March bankruptcy of Westinghouse Electric, a key contractor on the Plant Vogtle expansion, has raised questions about the viability of the project to build two new reactors at the nuclear plant near Augusta. The project, about a third built, is more than three years behind schedule and over $3 billion over budget.

Given the uncertainty, McDonald said Georgia Power should be asked to suspend collection of the surcharge. The other PSC commissioners instead decided to ask the Attorney General’s office if such a move was legally possible.

In his letter to the PSC, Walsh said the 2009 state law unambiguously stated that the surcharge “shall” be collected — meaning it is mandatory — based on the project’s ongoing construction costs, starting in 2011.

Under heavy lobbying from Georgia Power, state lawmakers passed the Nuclear Energy Financing Act in 2009, shortly after the Vogtle project was approved from the PSC.

Typically, utilities begin recovering the costs of big power plant projects from utility customers after the projects are completed and state regulators have determined which project costs are “prudent.”

This traditional approach “avoids having current ratepayers subsidize future ratepayers” who actually benefit from the long-lived nuclear plant, said Walsh in his opinion. But paying finance charges up-front “may assist in preventing any rate shock” after the project is completed, he added.

Under the 2009 law, customers are paying about $414 million this year in financing charges for the Vogtle expansion, according to Baker, the former PSC commissioner.

Through the end of 2016, customers had paid just under $2 billion in such charges, he said. The cumulative total will reach almost $2.38 billion this year, he said.

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Numerous Problems With Expansion of Georgia Power’s Nuclear Plant Vogtle Is a Bad Omen

With the nightmare of Fukushima, and WIPP, and numerous other nuclear accidents that have plagued us over the last few years, Georgia Power Company has insisted on building onto Georgia’s Nuclear Plant Vogtle. They should have been shut down a long time ago. That construction has caused problem after problem. Hell, we have been forced to pay for the construction, Georgia Power has been adding an extra $10-15 monthly for the construction, on top of the $20 monthly EPA violations fees we are charged monthly; after adding all that on, they figure the tax. So let’s face it, we are being screwed with around $50 extra a month on our power bills, and who the hell agreed to add onto a nuclear plant?

Looks like it is time to protest the expansion!

Anyway, here’s the story on AJC:

Matt Kempner
Georgia Power slows pursuit of another nuclear project
4:39 p.m. Wednesday, Feb. 4, 2015 | Filed in: Business

Georgia Power’s parent company is delaying initial planning for another new nuclear power project as it wrestles with growing troubles for a massive one already underway.

Southern Company chairman and chief executive Tom Fanning said Wednesday the company will hold off until it resolves issues in the delayed expansion of Plant Vogtle near Augusta. Consumers face the potential for higher power bills as Vogtle’s costs grow.

But Fanning, in an interview with The Atlanta Journal-Constitution, reiterated the company’s long-term faith in both nuclear energy overall and the Vogtle project’s value for consumers.

“We remain committed to nuclear as a dominant solution in the future to the nation’s energy portfolio,” Fanning said.

Southern has been a vocal advocate for U.S. nuclear expansion, even as interest from some other utilities has cooled. Others in the industry are watching the company’s progress on Vogtle, in part because of decades-old memories of massive cost overruns and delays in nuclear projects throughout the nation.

The two new reactors at Vogtle are the first newly licensed U.S. nuclear power units in 30 years.

Last year, Georgia Power chief executive Paul Bowers told The Atlanta Journal-Constitution there was a “very high probability” the company would ask state regulators as soon as this spring to let it take initial steps toward building still more nuclear in the state.

But when asked about it in an AJC interview Wednesday, Fanning said, “Before we move forward on new nuclear, I think it makes sense for us to resolve these issues” at Vogtle.

Construction costs are on pace to rise at least hundreds of millions of dollars beyond Georgia Power’s initial share of $6.1 billion. Contractors have warned the project will be delayed three years beyond its original schedule.

Fanning said even if the delays happen, they “will have minimal impact on rates to customers.”

But regulators and Wall Street have grown uneasy.

Under contract provisions, Georgia Power might be able to collect a maximum of $240 million in liquidated damages from its contractors if delays are as long as the firms have warned, Fanning said Wednesday in a conference call with analysts.

That money might not come easily. The owners of Vogtle, including Georgia municipal electric companies and electric cooperatives, are locked in lawsuits with the contractors.

Fanning told analysts he believes there also are financial disputes between the two biggest contractors, Westinghouse Electric Co. and Chicago Bridge & Iron.

Given the challenges, it isn’t surprising Georgia Power would want to hold off consideration of another nuclear project, said Chuck Eaton, the chairman of Georgia’s energy regulator, the Public Service Commission.

“To go forward with another project of this magnitude and not have the issues resolved I think would be very difficult,” Eaton said. But “nuclear has to be part of the mix,” he said, to have a stable energy source, help comply with future emissions restrictions and sidestep the price volatility of natural gas.

Given the current challenges at Vogtle, “the operative word is uncertainty,” said Paul Patterson, a utility analyst with research firm Glenrock Associates. “It is only prudent that more clarity be achieved” before pursuing another big nuclear project.

When Georgia Power’s Bowers addressed the idea of another nuclear project last year, he said a site had not been decided, and he said the planning would not lock the company into building new reactors.

ENERGY SOURCES FOR GEORGIA POWER:

Coal 35%

Natural gas (and oil) 39%

Nuclear 23%

Hydro 3%

Other energy sources such as solar account for a small but fast growing fraction of the company’s power.

About the Vogtle expansion:

Two new nuclear units are expected to generate enough electricity to power 500,000 homes and businesses.

The overall project initially was expected to cost about $14 billion. Georgia Power owns about a 46 percent stake in the new units. The targeted cost for its share of the project was set at $6.1 billion, but delays and other challenges threaten to add hundreds of millions of dollars or more to that price tag.

Georgia Power customers are paying financing costs for the project in their monthly bills. Construction costs will be added to bills once the units go into service.

Other U.S. nuclear power projects underway:

Two reactors at a SCANA Corp. project in South Carolina’s Fairfield County.

The Tennessee Valley Authority’s Watts Bar 2 reactor in Spring City, Tenn.