Most fees for nuke plant would go to investors, not debt

Most of the $1.6 billion in early financing fees that Georgia Power wants to charge customers for additional nuclear reactors would go to the company’s shareholders, and not to finance debt.

On Monday, Georgia Power confirmed figures presented by a legislative critic of its early financing measure, Senate Bill 31.

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State Rep. Don Wix, D-Mableton, tried and failed to amend that bill to exclude the $1 billion he estimated would flow to shareholders, if SB 31 is passed.

Georgia Power comptroller Ann Daiss later called Wix’s calculations “reasonable.”

She objected to his portrayal of that as prepaid “profit,” though.

She said the return paid to shareholders is what investors require to put their money into the new nuclear plants.

“The customers are paying the costs necessary to obtain the investments by others, both on the equity side as well as on the debt side.”

SB 31 would mandate that Georgia Power customers pre-pay financing costs for the company’s two planned reactors at its Vogtle nuclear plant.

Until Monday, the “financing costs” referred to in the bill were widely understood as interest on the company’s construction debt.

But the company would actually fund half of its construction costs with equity.

Because the return on equity is 11.25 percent — or about twice the interest on debt — shareholders would receive $1 billion in prepaid financing costs from ratepayers.

Debt holders would get the rest.

SB 31 passed out of the House Energy, Utilities and Telecommunications Committee without Wix’s amendment.

The bill, which has passed the Senate, could have a full House vote later this week.