Georgia Power customers could be paying as much as $100 million a year in sales taxes and fees wrongly added to the approved charges to fund the Plant Vogtle nuclear expansion, according to a lawsuit filed by two former high-profile politicians.
Georgia Power contends it must collect the taxes by law and notes that the money goes to the state.
The suit involves the monthly fee added to bills to essentially pre-fund two new reactors at the east Georgia plant. It claims the utility should not be also collecting sales tax and a municipal franchise fee on top of the expansion fee.
While those additional taxes and fees may be only $2 or $3 a month for consumers, they added up to between $93 million and $100 million in the past year, the suit says.
The lawsuit was filed by former Gov. Roy Barnes, a Mableton attorney and Democrat, and former House Speaker Glenn Richardson, a Republican from Dallas.
"This is not about challenging the rates, this is about challenging the sales tax calculated on the rates," Richardson said in Fulton County Superior Court Monday.
Monday's hearing before Judge Ural Glanville was on Georgia Power's request to dismiss the lawsuit. Attorney William Droze said the utility collects those taxes and fees because "we are providing a service to the state." The utility could face criminal penalties if it did not, he said.
"We are a good corporate citizen, and we have done nothing wrong here," he said.
Georgia Power won legislative approval to charge customers the financing costs to pay for the reactor project in 2009, under Richardson's leadership as speaker. Typically customers do not pay for power plants until they start operating, but the utility argued that collecting the money early would prevent interest rates from piling up and actually save customers money.
The monthly nuclear surcharge was $3.88 in 2011, but it will increase incrementally to $8.74 a month by 2015. The fee will go away once the reactors start producing power in 2016 and 2017, but then customers will start paying for the project's construction costs.
"This is something that the General Assembly said was a financing charge, but it's not taxable," Barnes said.
Georgia Power is part of a group of municipal and cooperative utilities adding two reactors at Vogtle, in Waynesboro. The utility is responsible for $6.1 billion of the project's estimated $14 billion cost.
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