Senate OKs early reactor fees

Georgia Power easily won state Senate approval Wednesday for its proposal to begin charging customers for new nuclear reactors before the plants begin operating.

The bill, which passed 38-16, included amendments that plugged some of the holes identified by consumer advocates and other critics.

But those critics, including the AARP, say they’ll continue to fight as the bill heads to the House, where support is up in the air.

Heavily lobbied by the state’s largest utility company, Senate Bill 31 would allow Georgia Power to begin charging customers for two new reactors near Augusta in 2011, six years before the reactors are finished.

Current state law would allow that, but only after review and approval of utility regulators at the state Public Service Commission. The PSC is considering a nearly identical Georgia Power request now.

The Senate bill would take the decision out of the PSC’s hands for the planned reactors and for others that the bill’s sponsor hint will soon follow.

The bill’s sponsor, Sen. Don Balfour (R-Snellville), called his bill a boon for consumers and Georgia’s economy and said it would pave the way for more than the two reactors now on the table.

“This bill is good for every homeowner. It’s also good for business,” Balfour said.

Sen. David Adelman (D-Decatur) called Balfour “a good guy who is carrying a lousy bill for Georgia Power.”

He said the General Assembly had no business injecting itself into utility regulation, or substituting its judgment for the PSC’s expertise.

Senate Minority Leader Robert Brown (D-Macon) scoffed at portrayals of the bill as simple and straightforward.

“When you hear this is a simple bill that does one thing, hold on to your wallet, your house, your car,” he said.

“This is a complicated bill that does one wrong thing,” he said. “It doesn’t belong here.”

With both the bill and the pending request at the PSC, Georgia Power is seeking to begin collecting an estimated $1.6 billion in financing costs for its reactor expansion project in 2011.

The reactors will cost $14 billion overall, of which Georgia Power will pay $6.4 billion.

They’re scheduled to be complete by 2017.

Traditionally, the company begins charging for new plants only when the plants are online.

Balfour said the early collection would lop $300 million off the reactors’ eventual cost and protect the utility’s bond rating, providing additional savings to consumers.

He likened it to getting a better deal on a new car by paying the interest upfront.

Critics say the savings are illusory and don’t count the cost to consumers of having their money tied up for years.

Adelman, borrowing from Balfour’s analogy, likened it to paying the interest on a new car several years before driving it off the lot.

AARP and the consumer group Georgia Watch are the bill’s most visible opponents. Large manufacturers, which opposed the early nuclear fee at the PSC, have been silent on the bill, which largely exempts them from paying it.

Large industries have been “carved out,” Brown said. “They got a deal.”

He told colleagues not to look in the bill for evidence of that deal.

“The place to see if the big ratepayers are exempted is in the hall,” Brown said, referring to the crowds of lobbyists that assemble there.

If there had been no deal, he said, lobbyists with “Gucci shoes would be all over you.”

Two amendments from the floor helped the bill’s margin of victory.

One, by Sen. Tommie Williams (R-Lyons), the Senate’s president pro tem, allows the state PSC to look at the utility’s entire financial picture when deciding what the company should be allowed to charge customers. The original bill prohibited that.

Williams said Georgia Power was not happy with his change. Consumer advocates, while still opposed to the bill, said Williams’ amendment improved it.

The second amendment, introduced by Sen. Renee Unterman (R-Buford), said the PSC retains its current right to offer discounts to low-income seniors, but must offer them to more seniors.

The amendment won’t sway the AARP.

“We think what Sen. Unterman is doing is commendable, protecting low-income seniors,” said AARP lobbyist Will Phillips, “but we need to protect everybody.”

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