Georgia “We’ve-Got-All-The” Power has just offered elected state regulators an all-or-nothing deal.
As in, Georgia Power gets it all or its customers get nothing.
The state's largest utility, which is a government-regulated monopoly, recently launched its latest campaign to continue its long-troubled, billions-of-dollars-over-budget nuclear expansion at Plant Vogtle, this time with new and far higher cost projections.
Georgia Power has asked the Georgia Public Service Commission to let it put all the company’s increased costs and risks on customers and to approve the changes without modification.
Otherwise, Georgia Power says, it and its partners may walk away from the unfinished project.
Oh, and if the project gets deep-sixed, the company will ask to be reimbursed for all its remaining costs, plus a healthy dollop of profits on the unfinished plant.
It might be a negotiating bluff. Or maybe it isn’t.
But so far this is a win-win deal for Georgia Power-Georgia Power.
In its filing with the state, the company suggests that its partners on the project are the ones insisting that Georgia Power not be forced to pay for its share of the massively flawed execution on Vogtle.
And who are the partners? Oglethorpe Power, which is owned by electric membership corporations scattered around the state, and the Municipal Electric Authority of Georgia, which is made up of city utilities in the state. Oh, and the city of Dalton’s utility system.
The restless partners were locked in on the project. But recently Georgia Power agreed to give them a series of potential outs, such as allowing them to abandon the project if the PSC doesn’t approve the new costs or ever decides Georgia Power can’t collect its share from customer bills if the costs are deemed to be unreasonable or imprudent.
This looks like a beautiful turn of events for Georgia Power.
But why would the EMC’s and city utilities care if Georgia Power’s shareholders shoulder some of the company’s costs rather putting it all on Georgia Power’s customers?
Sometimes the partners actually compete against Georgia Power to serve new large corporations. But are they trying to avoid undercutting each other’s prices, which might keep rates higher for those business customers?
That’s not what Georgia Power wrote in its filing.
“The reason for this condition is simple: the non-Georgia Power Owners are not willing to pass on to their customers costs that the Commission determined were unreasonable or imprudent to pass on to Georgia Power’s customers.”
Company spokesman Jacob Hawkins stressed to me that this is a unified recommendation and that Vogtle isn’t just a Georgia Power project.
Liz Coyle, the executive director of Georgia Watch, told me it looks like ratepayers will end up with all the risk, and she blamed the PSC’s elected members for missteps that left Georgia Power with all the, well, power.
To the company’s credit, this time it is making clear just how dicey and uncertain Vogtle’s path forward is. It lists a number of scenarios that could cause costs to spike even more.
So if state leaders give the project an OK — and so far it has the verbal backing of Gov. Nathan Deal and most elected members of the PSC — there should be no surprise later when prices soar even higher.
By then, of course, it may be even harder to put the brakes on the project.
Does it seem like Vogtle is a blank check made out to Georgia Power?
Gov. Deal suggested the expansion would provide “clean and affordable energy” and would create 800 well-paying permanent jobs in addition to the vast temporary construction workforce.
I like the "clean" part, which avoids carbon emissions many scientists have blamed for worsening climate change. But according to ratings agency Moody's, the project's cost per kilowatt of capacity is "materially higher than alternative sources of generation."
Georgia Power ratepayers could end up paying at least $1.4 billion more in capital costs because of the latest requested Vogtle increases. (Which doesn’t include billions in additional financing costs and extra Georgia Power profits.)
That comes out to Georgia Power customers paying at least $1.75 million extra for each and every new permanent job at Vogtle.
Does that sound like a good reason to take it or leave it?
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