Under the proposed settlement that the regulator's staff reached in October with Georgia Power, all of the project's costs through the end of 2015 are deemed "prudent," meaning they will eventually be added to customers' bills.
That includes Georgia Power’s portion of a $760 million lawsuit settlement with former project contractors. That issue prompted the PSC commission to order its staff to try to negotiate how ratepayers and the company, a regulated monopoly, handle past and future cost overruns.
The project, which will add two new reactors at the plant near Augusta, is billions of dollars over budget and three years behind schedule.
A panel of PSC staff and Georgia Power witnesses at Tuesday’s hearing said the deal is good for ratepayers because the utility will have to take a significant hit on profits if both reactors aren’t completed by the end of 2020.
The settlement will also slow future rate increases tied to the project, they said.
“We believe that the (settlement) is in the public interest and if approved will provide significant protections to the ratepayers,” said Steven Roetger, a PSC staff analyst.
Critics weren’t buying it.
During cross examination of the panel, consumer advocate Liz Coyle said it appeared that under the deal, ratepayers eventually will have to pay for $2.2 billion in costs overruns, while shareholders at Southern Co., Georgia Power’s parent, will only absorb $115 million.
“Are you asking this commission to accept that $115 million to $2.2 billion is justly balancing the interests of shareholders and ratepayers?” asked Coyle, executive director of the consumer advocacy group Georgia Watch.
Roetger said the deal is a “fair resolution” because the agency still have a chance to challenge future cost overruns, and it sets up large penalties that cut Georgia Power’s profits if it doesn’t complete the project by the end of 2020.
“We’ve got a lot of protections here. We have an automatic (profit rate) reduction” if Georgia Power doesn’t hit deadline,” he said.