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AJC.com > Legislature > Blog > Archives > 2009 > January > 15 > Entry
DEL.ICIO.USExtra fees for Georgia power’s nuclear plant
The Atlanta Journal-Constitution
Sen. Don Balfour (R-Snellville) expects to introduce a bill Friday that would let Georgia Power charge customers extra money each month to pay the interest costs of building two new reactors at its nuclear plant near Augusta.
The company doesn’t expect to start building until next year. It won’t finish the $14 billion construction project until 2016 and 2017. (Georgia Power’s portion of the cost is $6.4 billion. The state’s other power companies will pay the rest.)
“If we pay for the interest now, we’re saving money,” said Balfour. “The interest is going to be born by the customer either way.”
The Public Service Commission, which regulates utilities, is also considering whether to allow Georgia Power to collect the interest early. It is expected to decide the issue in March. Some see the pending legislation as an end-run around the PSC.
Balfour said the proposed fee would add about $1.30 to a homeowner’s bill each month. Georgia Power said the fee would ratchet up by a similar amount for each of the following six years. By 2017, the typical bill would have gone up $9.10 per month or $109.20 per year.
If Georgia Power didn’t collect early, the average homeowner’s bill would increase by about $11.70 per month once the reactors were finished.
“Your rate’s going to go through the roof when the plant comes on line,” Balfour said.
Opponents of the new fee say it puts the risk of building the reactors on the customers’ backs and does not save them money.
By the time the reactors come online, customers will have already paid nearly $2 billion of Georgia Power’s estimated $6.4 billion cost to build the reactors.
Georgia Power estimates customers will break even on the early pay plan in 2027 _ about 16 years after they started paying.
The actual reduction in the cost of the project from paying interest early is only about $300 million, or one-twentieth of the total cost.
Consultants hired by the PSC and by Georgia’s biggest industrial power customers testified this week at the PSC hearing that the early collection would end up costing customers $600 million over that same 16 year period. That’s because of inflation and the loss of opportunity to use the money.
“Rate payers have a cost of money as well,” consultant Lane Kollen told the PSC.
—Margaret Newkirk contributed
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