Commissioner Tim Echols said gas price forecasts were not grounds enough to forfeit construction. “I am not willing to trust anyone’s snapshot analysis today of future gas prices as a basis of abandoning the nearly $5 billion we have already invested in this eight year asset, ” Echols said.
In an approved motion authored by Echols, commissioners placed penalties and incentives to speed up construction at the project which is now only 40 percent complete. The commissioners say if units 3 and 4 do not reach commercial operation by June 2021 and June, 2022 respectively, the company’s profits would be cut. The commissioners said this would serve as an incentive for the company to meet their schedules.
In its ninth year since inception, Vogtle has suffered severe project delays and cost overruns, that could potentially double the estimated cost of completion, originally set at $14.3 billion. The units initially scheduled for completion this year have been set back 5 years, and will now be complete by 2022. The new completion dates have sent the budget inflated by over $10 billion to a projected total of $23 billion.
Georgia Power through Attorney Kevin Greene agreed to the conditions set by the commission, despite prospects that the company would get reduced profits.
Liz Coyle with a consumer advocacy group Georgia Watch said the profit cuts for Georgia Power would get were minimal in comparison to the profits the company would make over time.
“Its very bad news. It’s a win-win for Georgia Power and a lose-lose for their residential customers,” Coyle said of the vote.
The regulators also conditioned their approval of the Vogtle nuclear project on Congress approving roughly $800 million worth of tax credits.
As part of its decision allowing Georgia Power and its partners to pass more project costs onto ratepayers, the Public Service Commission unanimously approved language that would allow the commissioners to reconsider if federal lawmakers do not greenlight the tax credits.
“My motion to go forward is based on the assumption that these (tax credits) will, in fact, be extended,” Echols said. “But, if they are not, or if other conditions change and assumptions upon which the Company’s (Vogtle construction monitoring report) are based are either proven or disproven, the Commission may reconsider the decision to go forward.”
U.S. senators began laying the groundwork for approving the tax credits on Wednesday afternoon, when the tax-writing Finance Committee introduced legislation that would effectively guarantee the $23 billion project the credits. Republican leaders, however, have not laid out a timeline for action.
The vote, initially scheduled for February was pushed forward by commission chair Stan Wise to allow Georgia Power take advantage of tax benefits set to expire this year.
Responding to the vote by the comissioners, former Georgia House Minority Leader Stacey Abrams, a candidate for governor, said the decision, “demonstrates an allegiance to corporate shareholders, not to ratepayers and families.” She disagreed with the commissioner’s decision to not hold Georgia Power accountable with their blanket acceptance of conditions offered by the utility.
As part of their decision, commissioners ordered Georgia Power to credit each customer with $75 through three $25 monthly credits to be received before the end of the 3rd quarter of 2018. The commission says this is the best way to ensure customers benefit from the recent payment of the Toshiba Guaranty.
The Toshiba Guaranty, worth $3.68 billion was aimed at protecting ratepayers and Georgia power from cost overruns resulting from the March bankruptcy filing by Vogtle’s former project manager Westinghouse Electric Company.
Georgia ratepayers have been subsidizing construction of the twin plants since 2011. On average, they pay $100 a year towards Vogtle.
“In the grand scheme of things, it is a token gesture, “ said Kurt Ebersbach, an attorney with the Southern Environmental Law Center.
Construction of the two reactors almost came to a standstill early this year following the bankruptcy filing by lead contractor Westinghouse Electric Company. Since inception, the project has suffered numerous delays, design changes and a lack of a detailed schedule, which according to staff appointed by regulators to assess the project's costs and construction progress, could result in additional cost overruns.
Staffers found the project uneconomic on a to-go basis and recomended commissioners cancel the project if all their recommendations were not adopted.
In their most aggressive report presented to the commissioners early this month, staffers blamed Georgia Power for failing to manage the project and its contractor in a reasonable manner. They argued ratepayers should not be held responsible for additional costs resulting from Georgia Power's mismanagement of the project.
“This won’t be easy by any stretch, but it can be done.” Georgia Power Attorney Kevin Geene told commissioners.
Staff writer Tamar Hallerman contributed to this article.