Warm up your checkbook and get your debit and credit cards ready. Reckoning day is coming on the most gigantic construction project in Georgia and, in particular, on its blown budget.
This spring the expansion of the Vogtle nuclear power plant near Augusta was supposed to be finished, with the first of two new reactors cranking out electricity for businesses and homes all over Georgia.
Not going to happen.
It’s not going to happen next year either. Best case at this point is that it will be more than three years late. And consultants for the state worry even that timeline is wishful thinking.
But elected state regulators – members of the Georgia Public Service Commission, which most Georgians probably don’t even know exists – recently decided it’s now time to try to figure out if customers of Georgia Power should be forced to swallow all the company’s costs, including what looks like at least $1.7 billion in higher-than-expected expenses. That could send monthly power bills up in years to come.
The alternative is that Georgia Power and its shareholders eat some or all of the overage.
Guess which option Georgia Power thinks is right?
Critics of the Vogtle project have for years demanded tough analysis of Vogtle spending, rather than waiting to do so when the project is essentially completed.
But now some are having second thoughts.
That’s because the review this year would be led by the PSC’s staff, which already has a heavy to-do list for 2016, including reviewing new power rates, analyzing a 20-year plan for energy in the state and digging into the proposed merger of Georgia Power (the state’s biggest electricity provider) with AGL (the state’s largest distributor of natural gas).
Are they going to have the energy to also dissect more than $3 billion in Vogtle spending to date to see if all of it was reasonable and prudent?
(“Reasonable” and “prudent” are crucial measures in determining what costs Georgia Power customers must pay.)
‘Just bad timing’
Bobby Baker, a local attorney, has been a pain for the PSC. When he was a member of the PSC himself, he was the only one to vote against the Vogtle expansion. Now, he represents the Southern Alliance for Clean Energy, one of Vogtle’s most vocal critics.
“This is just bad timing,” Baker said of the PSC’s forthcoming review of Vogtle costs this year. “Nobody is opposed to doing a professional and prudent review. But that’s not what’s happening. It’s being rushed.”
Members of the PSC are generally big fans of more nuclear.
Most of them signed off on the Vogtle expansion. They agreed with Georgia Power that nuclear helps diversify the state’s energy portfolio, avoids limits tied to worries about climate change and hedges against the potentially steep price swings of natural gas.
Stan Wise, a long-time PSC member and, as he told me, “an unabashed supporter of the next generation of nuclear power,” convinced his colleagues to have staff review costs over the next eight months, rather than kicking the decision down the road to a time when different people might be on the PSC.
“Now, more than ever we need to send a message across the country that nuclear generation is viable and supported by the regulators in their respective states,” he told his colleagues in a hearing last week. (I listened to a recording of it.) “This commission approved this project. This commission should live up to its obligation to recognize schedule and price changes.”
I asked Wise whether his statements suggest he already made up his mind on the costs.
Not at all, he told me.
Outside help
PSC staffers can hire outside consultants to help with their review, Wise pointed out. And if the staff doesn’t have enough time to finish its analysis and negotiations with Georgia Power this year, Wise said the PSC doesn’t have to make a final decision on the cost questions any time soon.
Tim Echols, who is up for re-election to the PSC later this year, is the only member who voted against starting the review this year. He sent me an email stating that pursuing such a “monumental task” this year puts PSC staff “at a disadvantage in negotiations” with Georgia Power.
I hoped that a Georgia Power executive might chat with me about the planned review.
Instead, a company spokesman sent an email stating that Georgia Power welcomes the review: “All costs have been reviewed through the rigorous and transparent Vogtle Construction Monitoring (VCM) process and we are confident that our investments have been made prudently.”
The spokesman informed me a company executive wouldn’t take part in an interview with me “due to a consistent history of imbalanced, unfair reporting.”
Company executives didn't like a column I wrote last year. Or an earlier news story about last-minute pay-for-performance changes that boosted bonuses for leaders at Georgia Power and parent Southern Company. Or a story showing how Georgia Power morphed from giving assurances about its original Vogtle cost projections to expressing surprise that anyone would be surprised by the project's surging costs and delays.
Tough questions are reasonable and prudent. Let’s hope the PSC treats Vogtle costs as a topic worthy of rigorous scrutiny, not a way to try to bolster support for its past decisions.
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