Georgia’s utility commission is set to vote Tuesday on whether customers will pay for billions of dollars of cost overruns at a much-delayed nuclear plant expansion in exchange for up-front cost savings.
That trade-off is part of a proposed settlement between the Georgia Public Service Commission’s staff and Georgia Power, the lead partner in the project to build two new reactors at the Vogtle nuclear plant near Augusta.
The PSC staff and Georgia Power say the pact will save ratepayers about $185 million over the next four years and set stiff penalties if the utility doesn’t complete the two new reactors by a new deadline, the end of 2020.
But critics say the PSC’s five-member board appears poised, after a one-day hearing earlier this month, to accept a deal that gives scant up-front savings to customers compared to billions in cost overruns they will eventually have to absorb.
The tentative deal “creates the largest revenue requirement imposed on Georgia Power ratepayers based on the least amount of public review by the commission in its history,” said the Southern Alliance for Clean Energy, an advocacy group, in a filing.
The group said the proposed deal short-circuits the agency’s chance to disallow almost $1.6 billion for Georgia Power’s share of the cost overruns under a previously planned “prudency hearing” once the project is finished.
Georgia Power customers can’t be billed for costs that the PSC decides are “imprudent.” Georgia Power owns about half of the Vogtle expansion.
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 commission had ordered its staff more than 10 months ago to begin meeting with Georgia Power in closed-door negotiations to reach a settlement. It will vote Tuesday on whether to accept the deal that resulted.
The settlement gives Georgia Power an additional 18 months to complete the first new unit and an extra six months to complete the second one.
The deal also delays Georgia Power’s collection of another $139 million until the project is completed, over the expected 60-year life of the reactors.
Customers’ rates won’t go down as a result of the proposed deal. They just won’t go up next year, because a surcharge on customers’ bills that finances the Vogtle project is expected to stay at this year’s level.
The surcharge typically adds about $100 a year to most residential bills.
Rates going up
Future rates are still expected to go up once the Vogtle expansion is completed. They just won’t go up as much as previously projected.
The agreement doesn’t give “either party everything it wanted (but) is in the public interest and provides (Georgia Power) a clear way forward to complete construction,” the company and PSC said in a joint filing.
But in its filing, the Southern Alliance for Clean Energy said the deal is a rush job with little public oversight compared to how the PSC scrutinized the original Vogtle power plant’s costs after it was completed almost 30 years ago.
“The prudency review for Vogtle Units 1 and 2 took weeks of public hearings, contained extensive testimony from senior Georgia Power Co. officials, consultants and accounting experts and created an enormous public record on which the commission based its decision,” SACE said in a filing to the PSC.
The group said the “de facto” prudency hearing, if the PSC approves the deal, effectively gives its blessing for customers to eventually be billed $8 billion for Georgia Power’s share of the project, rather than the currently certified $6.1 billion.
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