The project, in which Georgia Power is the lead partner, is more than three years behind schedule and more than $3 billion over its original budget.
The PSC said the pact also benefits customers because it avoids potential litigation with Georgia Power over who has to pay for cost overruns, and sets stiff penalties if the Atlanta utility doesn’t complete the project by the 2020 deadline.
“We are pleased with today’s decision by the Georgia Public Service Commission,” said Georgia Power spokesman John Kraft. “It illustrates the importance and effectiveness of Georgia’s regulatory structure in both protecting customers while securing Georgia’s energy future.”
Critics said the deal failed to provide much protection to customers.
The PSC “wrongly rewarded Georgia Power, its partners and shareholders and lead contractor Westinghouse for years of mistakes that will cost utility customers billions of additional dollars,” said Sara Barczak, with the Southern Alliance for Clean Energy, an advocacy group. She said the project is “now a confirmed boondoggle.”
The hard-to-see savings prompted PSC Commissioner Lauren “Bubba” McDonald on Tuesday to propose an order that Georgia Power include a statement on customers’ bills starting early next year that shows how much the settlement is saving them. The PSC board unanimously adopted it.
So how, exactly, are customers going to see this $325 million in savings?
As a result of the deal, said PSC spokesman Bill Edge, Georgia Power has agreed to no increases in a surcharge to finance the nuclear project. The surcharge on customers’ bills, which typically now costs residential customers about $7 a month, otherwise would have risen to about $8.25 next year, he said.
That accounts for $185 million of the savings over the next four years. It comes from Georgia Power’s agreement to have its profit margin on the project reduced to 10 percent from 10.95 percent.
Without the deal, Georgia Power planned to seek an additional $70 million next year through an increase in the Vogtle-related surcharge.
The remaining $139 million in savings will be harder to spot.
Under the agreement, Georgia Power will still pocket that amount some day, but agreed to delay collecting it until after it actually completes the two new reactors and fires them up.
Also, the $139 million will be collected over the 60-year expected lives of the reactors.
But in any case, customers’ bills are currently still expected to increase about 2.5 percent once the project is done.
At that point, if the PSC approves the final cost of the Vogtle expansion, customers will start paying for it over a period of several decades.