Georgia utility regulators agreed Tuesday to scrap a proposal that would have eaten into Georgia Power’s profits should the costs for its nuclear expansion project exceed $300 million.
The Georgia Public Service Commission unanimously approved the plan after making sure the commissioners could review previously approved project costs if there is a budget increase. Customers would pay for cost overruns in their monthly bills unless the PSC determines the overruns are Georgia Power's fault.
"Does not the commission have the authority to deny any cost overruns that are not prudent to the project?" Commissioner Lauren McDonald asked a PSC staff member during Tuesday's meeting.
"Yes, that's why we believe it is a fair resolution," PSC advisory staff member Nancy Gibson said.
Georgia Power is part of a group of utilities building two nuclear reactors at Plant Vogtle. The utility is responsible for $6.1 billion of the estimated $14 billion project.
The company has been at odds with the PSC’s advocacy staff over how to handle potential cost overruns for the project. The advocacy staff wanted to cut into the utility’s profits if the costs exceeded $300 million over budget.
The advocacy staff agreed to drop its plan if Georgia Power allowed regulators to re-examine previously approved parts of the project if there is a budget increase. If regulators determine that Georgia Power's mistake led to the cost overruns, consumers would not have to pay the additional costs.
PSC Chairman Stan Wise said that part of the agreement is "the hammer that we still have in our tool belt."
Consumer advocates have criticized the PSC's move as shifting all of the burden of the project's cost onto Georgia Power customers, who already are paying for the plant's financing costs.
"By withdrawing their proposal for a risk-sharing mechanism that would, in part, force Georgia Power to take responsibility for any cost overages ... the PSC ensured that Georgia Power's profits will remain high and Georgia Power's ratepayers' bills will also remain high," Courtney Hanson, a spokeswoman for Georgia Women's Action for New Directions, said at a news conference before the meeting began.