A proposal to trim Georgia Power profits if its Vogtle nuclear construction project goes too far over budget is headed for a state Public Service Commission vote next week.
The PSC had hoped to be voting on a deal struck between its staff and Georgia Power, but that hasn't happened.
The PSC has delayed voting on a Vogtle risk-sharing measure for more than two years in the hopes that such a deal would be reached. In its absence, the staff's proposal will be on the table.
The staff wants to shave Georgia Power's allowed profit on the project if cost overruns top $300 million, and boost those margins if the project beats its budget by the same amount.
Kevin Greene, a Troutman Sanders attorney representing Georgia Power, suggested in a meeting Thursday that the company will take the PSC to court if it approves the staff plan Tuesday.
Georgia Power is building the new reactors in partnership with the state's city-owned power companies and electric co-ops. The total price estimate is between $12 billion and $14 billion. Georgia Power's portion is $6.1 billion, as approved by the PSC.
Georgia Power customers are paying the project's financing costs now. They'll pay for the construction costs after the reactors are finished in 2016 and 2017.
The project is under budget so far. But heavy construction begins late this year or early next.
PSC staff has pushed for a risk sharing mechanism since 2009. Attorney Jeff Stair said the intent is to more closely align company interests with those of ratepayers. Under the staff plan, he said, a $900 million cost overrun would reduce the company's reactor profits over 30 years from $10 billion to $9.7 billion. Cost overruns stemming from safety, efficiency or regulatory changes would be exempt.
Georgia Power says state law already protects ratepayers. The PSC can keep the utility from charging customers for any costs "imprudently" incurred.
The company also said accounting rules would force it to post a one-time loss of all lost profits over the reactors' lifetime, if its allowed return was cut. Stair protested that the company raised the issue at "long past the 11th hour" and outside of the public process: "The company has had two years to evaluate this proposal. The first time we heard of this issue was two days ago."
