Ga. Power may start billing for nukes before they're open

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Ga. Power may start billing for nukes before they're open
Customers would see small increase in bills sooner, rather than one big hike in 2016

By KRISTI E. SWARTZ
The Atlanta Journal-Constitution
Published on: 05/02/08

Georgia Power is considering billing customers for its proposed nuclear reactors at Vogtle before they start producing electricity, an executive said this week.

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David Ratcliffe, CEO of Georgia Power's parent company, Southern Co., told investors the utility may ask the state Public Service Commission if it could start collecting money to pay for the multibillion-dollar, 1,100-megawatt reactors as they are being built.

Under that plan, customers would see a slight increase in their monthly bills, perhaps within the next couple of years, instead of a large hike in 2016, the company and industry experts say. Current state rules allow utilities to recover costs only after plants begin operation. Advocates of so-called pay-as-you-go plans say consumers ultimately would pay less because they limit the effects of inflation and possible interest rate increases over the long run.

"We are considering whether or not we should discuss with the PSC the idea of minimizing the financial impact by asking for a [different] process," Ratcliffe said during Southern's first-quarter earnings call. "It will be a matter of discussion here in the next year or so."

The PSC in 2006 said Georgia Power could collect about $50 million in pre-construction costs for the proposed reactors. The utility is likely to face some opposition to a pay-as-you-go plan.

"All that does is it gives them a blank check for the cost of the plant to rocket completely out of control," said Neill Herring, a lobbyist for environmental groups.

Nuclear power is making a comeback in the United States as the nation tries to lessen its dependence on natural gas and foreign oil as well as cut back on carbon emissions and other pollutants. Based on the state's expected growth, Georgia Power says it needs to add more than 7,000 megawatts of capacity and that nuclear energy is essential to achieving that goal.

Georgia could join five other states — Florida, Louisiana, Mississippi, North and South Carolina — where utilities can collect money from consumers to pay for the construction costs of a nuclear plant before the plant starts up. New laws were required in those states.

"This is one approach to encourage companies to make the necessary investment [in nuclear]," said Paul Genoa, policy development director for the Washington-based Nuclear Energy Institute, an industry group. Several utilities in those states have asked to build nuclear plants because of the alternative-financing plans.

"If this legislation was not in place, we would not consider building new nuclear plants in Florida," Progress Energy Florida spokesman C.J. Drake said.

Georgia Power has not yet disclosed its estimated cost of building the two reactors, though that announcement is expected next week.

The Florida PSC still has to approve St. Petersburg-based Progress' plans to build two nuclear reactors. However, the utility has told state regulators that the costs would add an additional $7.50 a month to a typical 1,000 kilowatt-hour bill starting next year — and gradually increase to $25 a month in 2015, a year before the reactors are scheduled to start up.

Florida Power & Light Co., which wants to add two reactors near Miami, told the Florida PSC on Thursday it wants to recoup $259 million in nuclear-related costs from 2006 through 2009. If approved, the average bill for its 4.5 million customers would increase $2.51 starting next year.

Opponents say the alternative financing doesn't make sense.

"It's just an indication again that these power plants are not economical, and the only way they can make them economical is that they shift as much of the risk onto the ratepayer as possible," said Sara Barczack, safe energy director for the Southern Alliance for Clean Energy.

Georgia Power spokesman John Sell said the utility is a long way off from making a decision.

"We are reviewing what other states have done in terms of financing, but we have not made a decision on that issue at this time," he said.

Georgia PSC member Robert Baker remains unconvinced. "I haven't heard any persuasive argument that would support changing established policy in Georgia."

— Staff writer Margaret Newkirk contributed to this article.

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Comments

By Pro-Nuke

May 20, 2008 7:19 PM | Link to this

Solar and wind are great ALTERNATIVES...they are not however the solution.

Nuclear plants (as well as big coal plants) are base load plants, meaning they run all the time to meet the mimimum level of energy demand. You have to have consistent and reliable base load plants. Solar and wind aren't reliable...the wind isn't always blowing and the sun isn't always shining.

We are going to pay for the plant either way; I'd rather start now that watch the interest costs get bigger and bigger. Face it people, the cost of energy is going up dramatically...there is nothing Georgia Power or any other utility can do about it.

By Andrew

May 6, 2008 8:58 AM | Link to this

California's Million solar roofs initiative is a big boondoggle which won't enable them to take a single nuclear or coal plant off line. If actually implemented it will end up costing taxpayers many times more in direct subsidies than any modern nuclear power plant. Since 2006 it hasn't even resulted in 100MW of actual installed capacity.

Secondly, do some research and to avoid making a total fool out of yourself, private investors are willing to invest in nuclear power plants, such as the South Texas project. They are not willing to invest in gigantic nuclear power plant projects in Georgia though since Georgia power is a regulated utility - why park your money in an investment with limited upside when there are myriad opportunities to invest in de-regulated capacity.

Direct subsidies for the Million Solar roofs disaster are pegged at 3.2 Billion Dollars, direct subsidies for the South Texas Nuclear project? $125 Million. So even assuming the generating capacity is actually 3MW for the solar roofs program (which it isn't, since it isn't dependable and doesn't provide ANY base load power) that means that tax payers are receiving about ten times the payoff in clean energy from the South Texas project compared to the the million roofs project. The costs for the million roof project will be even greater, since tax payers will also have to pay for the health care costs of stupid people falling off their roofs when cleaning, installing and fixing their solar installations. Unlike nuclear waste storage and decommissioning, which is entirely paid for by taxes on the nuclear industry.

By cass

May 2, 2008 1:12 PM | Link to this

As a former State of Georgia employee in this field I have two comments. First, Mr. Moxie is correct, it would be better to pay some now because the cost of the dollar now is less than it will be later second, GP will re-coup all costs either now or later regardless. They are regulated by the GA Public Service Commission and the law states that they can re-coup all reasonable and prudent costs. If the GPSC and the NRC allow the additional reactor at Plant Vogtle, then the project will go forward and rate payers will either pay now or later.

The decision to pay now or later however, is up to the GPSC. For those of you who are GP customers you can monitor the GPSC Energy Committee Agendas and when the subject comes up, you have full rights as a consumer to speak to the Commissioners face to face. Just go to: http://www.psc.state.ga.us/exsec/committe.asp. The agendas are always posted and Energy Committee is held every 1st and 3rd Thursday of the month.

By Anson Roberts

May 2, 2008 11:02 AM | Link to this

I grew up on Long Island (NY). The local Looney Tunes Power and Light Company (LILCO) got this scheme past the regulators. They "pre-billed" people for TEN YEARS for a nuclear plant that was scrapped before it ever generated a watt of electricity, at a cost in the billions.

Did ratepayers get a refund for their pre-payment? Nope.

Did investors lose a dime due to the incompetent management? Also nope.

Have rates gone down now that the plant has bee scrapped? A third and final "nope."

By Kenneth H. Sayers

May 2, 2008 10:55 AM | Link to this

GO SOLAR, NOT NUCLEAR

For the cost of that plant we could put solar panels on every house and not need to worry about disposing of their waste.

By Kenneth H. Sayers

May 2, 2008 10:45 AM | Link to this

GO SOLAR, NOT NUCLEAR

No one has yet found a way of safely disposing of the waste that nuclear power plants generate. If everyone had solar panels we wouldn't need more generating capacity.

By Kenneth H. Sayers

May 2, 2008 10:42 AM | Link to this

GO SOLAR, NOT NUCLEAR

No one has yet found a way of safely disposing of the waste that nuclear power plants generate. If everyone had solar panels we wouldn't need more generating capacity.

By ed

May 2, 2008 8:55 AM | Link to this

Why not? Let's jump for every idiotic scheme to separate us from our hard-earned dollars. Let Georgia Power try this scheme on bond investors and see how fast they're laughed out of the room.Unfortunately many senior citizens will be in their graves befoe the new plant goes into production. Many other customers will have moved out of state. Customers should not be forced to pay for electricty before it's available.

By NIMBY

May 2, 2008 8:31 AM | Link to this

@MW : Ditto..

Big business wanting to take more money from people then, oopsie, change their mind down the road.

It could happen.

And then what?

The money goes to something that was not previously approved by.....

The People.

Novel concept these days, I know, but still.....

And then what about all those who paid for something they'll never see because they pass away long before 2016?

No offense, but, yeah, I can see smooth sailing all the way to the bank on this one, GP. :))

By MW

May 2, 2008 7:50 AM | Link to this

I prefer to pay for what I use, and not a dime more --I'll pay for the higher percentage increase when I'm actually using power generated from the plants, but not prior to.

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