Home > Political Insider > Archives > 2009 > February > 05 > Entry
DEL.ICIO.USClark Howard, Georgia Power, and the ‘C’ word
The Atlanta Journal-Constitution
Last week, in a brief and local cutaway, WSB consumer specialist Clark Howard went ballistic on a bill to permit Georgia Power to charge ratepayers upfront for the cost of financing two new nuclear units not scheduled to come online until 2017.
A Senate vote on S.B. 31 could come as early as Monday.
On the broadcast, while Howard twice called the utility an upstanding corporate citizen, Howard noted the influence being brought to bear on behalf of the utility, and dropped the biggest, baddest “C” word in politics.
“It’s one of those times, one of those symbols, where the actual, real effects of corruption are borne by you and me, not indirectly, but immediately and directly,” the radio host said.
In political terms, the original broadcast had a small, insignificant audience. But the Internet gives everyone a permanent shelf life, and that four-minute Howard spot is now breezing around the state Capitol via YouTube and an e-mailed mp3 file, giving utility lobbyists heartburn.
We’ve been slow to post it, simply because the bosses insist on following federal copyright law. Howard had to give his permission — and now he has. (Hat tip to Jason Pye for making the YouTube clip.)
“Georgia Power went berserk,” Howard said. He’s got an off-air sit-down with them next week, to hear out the utility. The above spiel was impromptu, Howard said.
And there are some inaccuracies.
For instance, Howard, 53, says he’ll never use a kilowatt hour from the plants in his lifetime. The plants are scheduled to fire up in 2017. We wish him a longer stay here than that.
Howard also says that average Joes will be required to shoulder the entire load. Not quite true.
But a report by the staff of the Public Service Commission said the load is, in fact, skewed:
Limiting the allocation of financing costs to rates designed to recover embedded capacity costs means that approximately 37.7% of all kWh sold and 20.9% of base revenues are exempt from the allocation. Costs that could have been allocated to certain large industrial and commercial customers, would have to be allocated to remaining customers, thus increasing their rates even more.
Georgia Power has challenged that assessment in this document. Christy Heiser, a spokeswoman for the utility, expressed “surprise” at Howard’s opposition. One of her points: S.B. 31 would “help preserve the company’s credit ratings, which will save literally hundreds of millions of dollars for consumers.”
Complicated issues like this often turn on simplified, even simplistic representations. And given Howard’s standing as a trusted voice for consumers, his digitally preserved remarks are likely to become an important factor at the state Capitol next week.
We offer a partial transcript of Howard’s remarks on the jump, along with Georgia Power’s response.
Photo credit: Joey Ivansco/AJC
From Jan. 29 broadcast of “The Clark Howard Show” on WSB Radio (750AM):
”There’s something that a good corporate citizen, Georgia Power, is doing right now that I think just absolutely stinks.
“They have 70 lobbyists — 70 — at the Georgia State Capitol. Seventy. And they are down there, working the halls like you can’t believe, trying to pick your and my pocket in a way that is absolutely disgusting.
“Georgia Power has an initiative to build new nuclear capacity in Georgia. They do not want to shoulder the financial risk of it upfront. They want the Legislature to put the risk on you and me upfront, for power that you and I would not benefit from for — well, gosh, I’m 53. If I live a normal lifespan, I might not get a single kilowatt from it, but I’ll have to pay for it the rest of my life.
“And what’s worse, the big commercial users of power in Georgia were opposed to Georgia Power getting this plant pre-funded by the ratepayers. And so Georgia Power didn’t think they could get the bill through as result, so they then exempted the big industrial and commercial users like shopping centers retailers factories and all that, so 100 percent of the cost of building this plant now gets passed on to you and me — upfront.
“And even worse, the way the bill is structured, in the Legislature, the greater Georgia Power’s cost overruns are on the new nuke plant, the more profit they end up making from charging us money up front. In other words, we take all the risk. Georgia Power gets full reward for not being cost-efficient in building the plant. Don’t check your hearing. That’s what’s going on….
“It’s one of those times, one of those symbols, where the actual, real effects of corruption are borne by you and me, not indirectly, but immediately and directly.”
Georgia Power’s response on Feb. 6.
Georgia Power is surprised that Clark Howard opposes a bill that will:
— Provide Georgia Power customers the same benefits of reduced interest expenses that customers of other utilities* in the Southeast and in Georgia can receive.
— Reduce total increases required to recover the cost of the plant from 12 percent to 9 percent.
— Help preserve the company’s credit ratings, which will save literally hundreds of millions of dollars for consumers.
— Help put the plant in rates in a way that does not cause “rate shock” - by phasing in the cost over seven years versus putting all of the cost in two years.
— Reduce financing costs by $300 million, directly benefiting consumers.
— Reduce the in-service cost of the plant by nearly $2 billion, which will save money for customers over the remaining life of the plant.
*Other utilities in Georgia have the ability to recover financing costs during construction - and have done so previously. Additionally, other states around Georgia have passed legislation that allows recovery of financing costs during construction, particularly utilities that are considering new nuclear power plant projects. States that have passed legislation include Florida, South Carolina, Louisiana, Virginia, and Mississippi.
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Comments
By Cherri Brown
February 5, 2009 7:42 PM | Link to this
If upfront cost approval demands that funding allocators (the public) receive full disclosure of all expenditures, including salaries and employee records as those records are relevant to job qualifications.
Good business decisions are not made by chance ;they are made and become successful with full participation with knowledge and understanding of the investment request.
Why would an allocator of funds not demand to know what the investment involves? Every last detail. Open records.
By Cherri Brown
February 5, 2009 7:43 PM | Link to this
If upfront cost approval demands that funding allocators (the public) receive full disclosure of all expenditures, including salaries and employee records as those records are relevant to job qualifications.
Good business decisions are not made by chance ;they are made and become successful with full participation with knowledge and understanding of the investment request.
Why would an allocator of funds not demand to know what the investment involves? Every last detail. Open records.
By The Blogfather
February 5, 2009 8:28 PM | Link to this
Howard stole the C word from my blogs. I’ve accused the assembly of corruption for years. I was railroaded and banned by every blog and every news team in the piedmont.
he gets hero status.
BTW: any estimates of costs for building a nuclear power plant must be multiplied by five. It always costs five times as much as they think it will. always.
fact.
By Montana L
February 5, 2009 10:25 PM | Link to this
Hey, wait, isn’t settling this kind of biz why we have the PSC?? Hey GP, y’all reckon this is p** off the people that set yer rates??
By The GodBlogger
February 5, 2009 11:06 PM | Link to this
The Newspaper In Heaven.
Does anyone here remember where they were when Christ was crucified? Send your comments to the GodBlogger.com. There will be a five minute delay so that my staff can come up with some really good ones. You should see my steno pool.
How many gods do U C in your life?
By The GodBlogger
February 5, 2009 11:20 PM | Link to this
Christ was god. I mean, you guys get that, right? The divinity of Christ was the inquisition, the crusades, and the fifties.
Elvis was seen in a burger king in france today………..drive safely, for the life you save maybe james dean’s…….no marilyn, dont pose for that playboy executive………pass me the torch, mr president…..pass me the torch, mr president….pass me the torch mr president…..
The torch has been passed to a new germination…….
By The GodBlogger
February 5, 2009 11:58 PM | Link to this
The beatitudes deserve special attention. The poetry isn’t important despite it’s breadth. The language that survived is what instructs us. Just really focus on the beatitudes. An entire lifetime of contemplation couldn’t decipher them, yet they allow glimpses of eternity…….inherit the earth……that language wasn’t christ’s….that was a translation, using a detached observer, who knew the early language and understood that there was no idiom that could be phrased as “inherit the earth” back when all there was was the spoken word. You’d have to learn aramaic, that is, if you believe the evidence that shows christ would have had to use that language because we have 12 points of origin of christ: his disciples. They all spoke aramaic. They drove each other nuts with it. The first schism in christ’s new church was over the circumcision. that’s a mathematical certainty of truth. Only about getting clipped would i make a stand against christ. wtf?
Is it possible that all 12 disciple were morons? Is that the final gag? We’ll discover that he had to pick these exact men because of who they were at the time they were being themselves with family and tribal ties. 12 black sheep? Hundreds, if not thousands of people knew who the disciples were. The weddings were all big and fat, capiche? the very, very first civilians that heard the christ story were instructed by 12 disciples. so you have to multiply 12 times something, like 2000 people in one tribe back then. What if the apostles were all from the same tribe? What tribe were the disciples from? Does it matter? Wouldn’t you listen to your cousin talk about his time with the actual christ and Lord? You could finally have him committed. or maybe you’ll get lucky and he’ll hang himself, like Judas did, so you multiply by 11 instead, and that’s when you hear the c*ck crow.
I really soured on all of this when the shroud and the lord’s prayer were found to be frauds. That really opened up the floodgates of the Joel Osteen’s self help tents. Nobody can touch Earnest Angley.
Nobody. He’s the george jones of the evangelists.
By Aaron Burr V. Mexico
February 6, 2009 9:59 AM | Link to this
Don’t forget the hidden beatitude in Republican bibles.
“And Jesus Died for Lower Taxes.”
By City Atlanta resident 14 yrs
February 6, 2009 11:26 AM | Link to this
Clark for Mayor! Down with Shirley’s politico machine and Kasim Reed! Enough corrupt backscratching at the City and State llevel, the Beltline payoffs and this with Georgia Power is just criminal. Clark’s right, and Ga Power’s whining b/c they can’t run rough-shod over the tax payers (what’s the old song? “Get yer money fer nuthin’ and yer chicks fer free” -?) I’m TIRED of my tax dollars paying for infrastructure that rightfully should be borne by the developer or agency…
By Disgruntled Granny
February 6, 2009 4:22 PM | Link to this
There are small towns all over the state where the Georgia Power point man (executive type) is the biggest dog in town — probably makes more than the mayor, and is a generous, open handed son of the local church. State Senators and Representatives depend on this good ole boy in their patch to be open handed when they are running for office — in fact he may well be the largest single contributor they get. Well, boys, it is payback time and why not? Well, the why not is that you and I will be paying through the nose for something a lot of us will never get to use. For instance, this disgruntled granny is 65 — in 17 years when this boondoggle is supposed to be on line I may well be gone (specially if healthcare cost keep going up,up up).
But, hey young feller, do you want 17 years of triple digit power bills — high triple digit bills — just because there is no incentive in the CWP Bill 31 for Ga Power to bring the project in on budget and on time. A SIMILAR PROJECT (IDENTICAL REACTORS) COST ALMOST THREE TIMES THE PROJECTION.
The facts are the legislature created the Public Service Commission to deal with regulated industries like Ga Power. Now Ga Power wants an end-run around the PSC through the legislature. Since the PSC has resources internally to research these matters, look at the real effects on the economy, the power grid and the public, they just might have sense enough to call a halt to this boondoggle before we all wind up in the poor house. Oh, by the way, Ga. Power has no intention of giving up its annual rate increases. They think they can have their cake and eat it to — STOP THEM NOW. WRITE, CALL OR, BETTER, VISIT YOUR SENATOR AND TELL HIM NO.
By Lee
February 7, 2009 10:21 AM | Link to this
Okay, I’ll type r-e-a-l s-l-o-w so y’all can understand. Pay attention Clark Howard…
Ga Power goes before the PSC and presents their load forcasts and gets approval to build a plant. At that point, the ratepayer is on the hook. They are going to pay for this plant when it is built. There may be some adjustment to the total cost as the PSC conducts it’s prudency review, but the rate payer is going to pay.
At this point, you’ve got two alternatives. (1) You can wait until the thing is built and then get hit with a large increase as the total allowable cost, as determined by the PSC, is placed into the rate base, or, (2) you can go along with this proposal and gradually see an increase in rates and save some money on financing the plant.
I don’t know, maybe Clark Howard needs a refresher course on Compound Interest and how much it costs Ga Power to float a billion dollars - which, by the way, the costs of which will work it’s way back into the rate case.
By Mae North
February 7, 2009 11:05 AM | Link to this
I wonder what the rating on that Ga Power debt would be. Maybe this whole thing could be more useful to us as a derivative…..not build anything just sell the chance we might pay back the loans.
I like it. Frank, get Maddoff on the phone……D’oh!
By Don
February 9, 2009 8:05 AM | Link to this
The omission of the large commercial payers that is one really unfair part of this proposed legislation plus the end run of the PSC by having a law passed by the legislature- that is another bad deal. 70 lobbysts is outrageous-that is why a legislator cannot breathe without being harassed or coaxed consider these guys and telecommunications and unions. Call your state Senators and say they must add the commercial payers or kick the whole thing back to the PSC where it belongs. Go to the Georgia government web site and look for senators and representatives. Contact your senator, in Gwinnett I have Balfour.
By Filth
February 9, 2009 5:25 PM | Link to this
Our state rep’s and state senators, Republican and Democrats, like Don Blafour have no problems accepting gobs of cash and gifts from Georgia Power. In Georgia, elected officials don’t represent the people. They just do as exactly lobbyists and Georgia Power/Southern Company instruct them to do.
By leila
February 11, 2009 6:11 PM | Link to this
As a senior citizen the pass through rate would allow me to pay for some medicine I currently can’t afford. As for the PSC, I have been trying what purpose they serve. When I had a problem they just dismissed me.
THERE SHOULD BE A LAW LIMITING LOBBYIST.
TRYING TO SURVIVE.
By leila
February 11, 2009 6:14 PM | Link to this
As a senior citizen the pass through rate CHARGED BY GEORGIA POWER would allow me to pay for some medicine I currently can’t afford. As for the PSC, I have been trying TO DETERMINE what purpose they serve. When I had a problem they just dismissed me.
THERE SHOULD BE A LAW LIMITING LOBBYIST.
TRYING TO SURVIVE.