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DEL.ICIO.USGeorgia Power bill delayed to allow Senate Republicans to become ‘more comfortable’
The Atlanta Journal-Constitution
Senate Majority Leader Chip Rogers (R-Woodstock) says the bill to permit Georgia Power to charge ratepayers in advance for the financing costs associated with two new nuclear units will be delayed at least until mid-week, to permit Republicans to become “more comfortable” with the measure.
Rogers said a GOP caucus meeting will be held Tuesday, when the Legislature reconvenes after a three-day break, to discuss S.B. 31.
“I don’t think it’s going to come up tomorrow, but we may see it in the near future. This is a very difficult bill to understand. I think when you just simply hear the theory — of let’s pay the interest up front instead of waiting for it to compound seven years down the road — most people can grasp that,” Rogers said.
“In reality this is a very difficult measure to deal with, because there’s a lot of complexities that go on in determining what is the interest on that loan and how does that fit into the whole rate-making scheme that the Public Service Commission determines,” Rogers said.
“I can’t say whether we have the votes or don’t have the votes. I imagine it’s rather close. But I do think whether you’re for it or against it, all of us would like to feel more comfortable about it,” he said.
“I don’t think there’s a conceptual problem if we can prove that it saves money.”
The bill would set terms that would allow Georgia Power to recoup from ratepayers the interest charges on billion-dollar construction loans — a negotiating task normally assigned to the Public Service Commission.
Rogers said the utility feared that the PSC might change aspects of the deal once it’s been agreed to. But the Senate majority leader conceded that a future General Assembly, too, could “undo” the terms contained in the current legislation.
Comments
By LR
February 9, 2009 12:24 PM | Link to this
Paying upfront to avoid the interest expenses of taking out a loan can be a good thing. However, the bill as it’s written now provides for NO oversight by the voter-elected board of Public Service Commisioners, and no means to protect taxpayers from paying extra if Georgia Power has cost overruns. Clark Howard has a piece on YouTube that even details how Georgia Power can make MORE profit if they allow the costs of the project to increase.
Investment in clean burning energy, like nuclear, is something I would normally support but this bill stinks. I’d encourage any similarly concerned voters to take this delay as an opportunity to call your state senator and urge them to vote No on this measure
By ss
February 9, 2009 2:45 PM | Link to this
This entry neglected to mention that the bill exempts businesses from the fee. Only residential customers are required to pay the extra tax…er, fee.
By Craig S
February 9, 2009 2:47 PM | Link to this
I am a college student who thinks nuclear power has a play in our energy mix going forward. It only makes sense that if you start off paying the interest on a construction loan it is a much more responsible way to address the cost than if you wait till the plant is operational. Kudos to long-range leaders.
By David K
February 9, 2009 2:59 PM | Link to this
One of the reasons we lose jobs and economic development to other states around Georgia is because we don’t do a good job of encouraging business to come hear and expand. When I called my state legislator I was told that every other state in the Southeast has a law like this to pay down the cost of utility investments while they are being built.
By David K
February 9, 2009 3:03 PM | Link to this
One of the reasons we lose jobs and economic development to other states around Georgia is because we don’t do a good job of encouraging business to come hear and expand. When I called my state legislator I was told that every other state in the Southeast has a law like this to pay down the cost of utility investments while they are being built.
By JoJoWazoo
February 9, 2009 4:29 PM | Link to this
This is such a bad idea for the consumer. In the mid to late 1970’s into the ’80s the Long Island Lighting company (LILCO) built the Shoreham Nuclear Power Plant on Long Island. The power plant never went online for various reasons and the LILCO customers were stuck with the $6BILLION bill for which they are still being charged on their bills for and this is now 2009! Thirty years later the monster sits on the shores of the Wading River and the people are still paying for the eyesore! Urge your state senator to vote NO on this bill!
By JoJoWazoo
February 9, 2009 4:32 PM | Link to this
This is such a bad idea for the consumer. In the mid to late 1970’s into the ’80s the Long Island Lighting company (LILCO) built the Shoreham Nuclear Power Plant on Long Island. The power plant never went online for various reasons and the LILCO customers were stuck with the $6BILLION bill for which they are still being charged on their bills for and this is now 2009! Thirty years later the monster sits on the shores of the Wading River and the people are still paying for the eyesore! Urge your state senator to vote NO on this bill!
By JoJoWazoo
February 9, 2009 4:33 PM | Link to this
This is such a bad idea for the consumer. In the mid to late 1970’s into the ’80s the Long Island Lighting company (LILCO) built the Shoreham Nuclear Power Plant on Long Island. The power plant never went online for various reasons and the LILCO customers were stuck with the $6BILLION bill for which they are still being charged on their bills for and this is now 2009! Thirty years later the monster sits on the shores of the Wading River and the people are still paying for the eyesore! Urge your state senator to vote NO on this bill!
By Thanks For Nothing
February 9, 2009 5:28 PM | Link to this
Thank you, Republican State Senators and Representatives, for allowing Georgia Power to take my money without taking on any risk themselves. I used to be a conservative, but there is no elected conservative left in Georgia. Georgia Power bullies every one of its customers, and no one looks out for us, the little guy.
By Montana L
February 10, 2009 9:50 AM | Link to this
This construction will go overbudget, if for no other reason than this bill removes any Georgia Power incentive to get the thing done.
By Better in Metter
February 10, 2009 5:03 PM | Link to this
SENATE BILL 31: SHOULD GEORGIA POWER PREBILL FOR NUCLEAR CONSTRUCTION? PRO: Method cuts costs for all
By Don Beaver
For the Journal-Constitution
Tuesday, February 10, 2009
Chambers of Commerce across our great state are committed to meeting the needs of their citizens while helping to create a quality of life second to none.
The Cobb Chamber, along with the chambers of Douglas, Clayton, Gwinnett, North Fulton, Rome-Floyd and others support SB 31 and believe it is good for consumers and our state.
Other utilities in Georgia can recover financing costs during construction —- and have done so previously. Additionally, states around Georgia have passed legislation that allows recovery of financing costs during construction, particularly utilities that are considering new nuclear power plant projects.
SB 31 does not affect the Georgia Public Service Commission’s authority to approve the construction of the nuclear units and certify the cost that Georgia Power is allowed to recover. The PSC will monitor the construction of the nuclear units to determine whether costs are prudently incurred.
Georgia Power’s other alternatives are coal and natural gas. Coal and natural gas prices are highly volatile. Both fuels also face the probability of a federal carbon tax, which will make fossil fuels even more expensive in the United States.
Contrary to opponents’ assertions, the PSC does not allow Georgia Power to sell power from power plants paid for by customers in Georgia —- unless the proceeds from those sales directly benefit the company’s customers. Georgia Power also imports power from other states, when doing so will save money for customers or maintain reliability for customers.
To retain the nuclear energy option for Georgia’s future, and help keep the state competitive with other states, we believe we must provide Georgia Power the same financing options available to other utilities in Georgia and the Southeast.
Like our other utilities in Marietta and Cobb, Georgia Power has invested millions of dollars in infrastructure improvements as our region has grown. These massive investments are straining these utilities’ ability to raise money at the lowest possible interest rates.
For large capital projects like nuclear power plants, this problem is multiplied because utilities must borrow billions of dollars for plants that take years to build. If utilities are allowed to financing costs as these projects are under way, they avoid “interest on interest” costs —- saving customers money.
And when utilities are allowed to recover financing costs during construction, they protect their credit rating, thus lowering their costs to consumers.
Cobb County has one of the best bond ratings of any county in the U.S., and this saves taxpayers millions in interest expenses when the county borrows funds for roads, schools and parks.
Likewise, Georgia Power has one of the best bond ratings among utilities in the U.S. For Georgia Power customers, damaging the company’s bond rating by putting further strain on its capital budget could cost customers millions a year more in financing costs.
By opposing SB 31, opponents are effectively opposing further nuclear power plant development in Georgia, thus encouraging further reliance on fossil fuels and their volatile prices —- and even greater exposure to expensive carbon taxes.
By opposing SB 31, opponents are not only opposing a recovery method that will save customers hundreds of millions of dollars, they are opposing the only phase-in approach that is allowed.
Our state and nation must take action to address our present and future energy needs. And we need courageous leaders to stand up and help take the actions necessary to meet those needs.