Georgia Power nuke fee higher on front end

By Margaret Newkirk

The Atlanta Journal-Constitution

The nuclear power expansion fee that will show up on Georgia Power bills in January will be bigger than the utility indicated when lobbying for the levy, according to plans filed Friday.

Georgia Power said the initial fee will add $3.73 to the typical monthly residential bill in 2011 -- more than double the $1.30 figure the company and its supporters used when it convinced the state legislature to allow the fee.

In the Public Service Commission filing, Georgia Power also said the fee will ratchet up to $9 over the following four years, rather than six as it had suggested last year.

However, the total amount collected through the fee to help pay for two new reactors will remain unchanged, Georgia Power said. It's the initial amount and pace of the increases that differs from the company's previous indications.

Company spokeswoman Christy Ihrig said the faster time line more accurately reflects when the company believes it will incur costs on its Plant Vogtle reactor project.

Fee opponents said the public was tricked.

"It's the old bait and switch," said Angela Speir, executive director of Georgia Watch and a former PSC member. "Georgia Power told legislators it would be one thing, but when ratepayers get their bill, it's something else."

AARP spokesman Will Phillips also criticized the change.

"Georgia Power sold the legislature (on the fee) as a way to help customers avoid rate shock," he said. "And now, in this economy, the increase they propose to give to customers in January 2011 is more than twice what they estimated."

"After Georgians all across the state have been voicing their concerns about this and other rate increases, we wonder if Georgia Power is even listening," Phillips said.

After the $3.73 addition to a typical bill next year, the fee will add another $1.44 in 2012, $1.50 in 2013, $1.22 in 2014 and 82 cents in 2015, according to Georgia Power, with the additions cumulative.

When seeking approval for the fee, it had used figures that called for the fee to increase roughly $1.30 per year for seven years.

The new fees will come on top of whatever basic rate increase Georgia Power wins from state utility regulators later this year. The company has asked for more than $1 billion in increases, phased in over 26 months beginning in January. The proposed rate increases would add $18 per month to the typical household bill.

Georgia Power's nuclear fee is intended to pay about $1.6 billion in financing costs for constructing two reactors at its Vogtle nuclear plant near Augusta. They are scheduled to be complete in 2016 and 2017 and are on pace to become the nation's first new reactors in decades.

The reactors will cost an estimated $14 billion total, of which Georgia Power customers will pay a little less than half: Co-op and municipal power customers will pay for the rest.

Under state law and utility regulatory policy, power customers don’t typically pay for new generation facilities until the plants produce power. But in 2009, Georgia Power convinced the legislature to pass Senate Bill 31, which changed that for  nuclear reactors.

SB 31 was one of the most intensely lobbied measures in years. Company lobbyists and the bill's sponsors all used the $1.30 per month initial increase figure to sell it.

The company said the early collection would reduce rate shock and shave the reactors’ final cost to ratepayers by about $300 million.

Georgia Watch, AARP, radio consumer advocate Clark Howard and conservative blogs like Peach Pundit and Political Vine all opposed SB 31, saying it  shifted risk to ratepayers and forced some consumers to pay for plants they will never use.