In their recent, perhaps most aggressive report presented to the Georgia Public Service Commission early this month, staffers blamed Georgia Power for failing to manage the project and its contractor in a reasonable manner. Staffers argued ratepayers should not be held responsible for additional costs resulting from Georgia Power's mismanagement of the project.
They say it’s time Georgia Power and its stockholders also bear project risks and costs, instead of allocating them solely to ratepayers.
This is the first time in eight years of reports that staffers have called on commissioners to ‘modify’ Georgia Power’s proposed conditions before letting the project go forward. In the event that the commissioners don’t do so, they recommend project cancellation.
Georgia Power wants the commissioners to approve their proposed costs and schedules, keep the project going and approve their new management alongside other demands.
Steam rises from the cooling towers of nuclear reactors at Georgia Power’s Plant Vogtle, in Waynesboro, in this 2010 photo. ( AP Photo/Mary Ann Chastain, File)
Here are some possible outcomes of Thursday’s vote:
Adopt staff recommendations and keep the project going
Staffers recommended the commission find reasonable only $44 million of the $542 million in costs the company said were incurred from January to June. They found that $498 million of the amount requested by Georgia Power covered liens tied to Westinghouse contractors and should not be paid for by customers, as the costs were not directly tied to the project.
Staff also recommended that stockholders take on any additional costs overruns deemed unreasonable by the commission. Peter Bradford, a former member of the U.S Nuclear Regulatory Commission, who gave testimony on behalf of the Southern Alliance for Clean Energy recommends placing a cap on the amount ratepayers should be held responsible for.
Georgia Power has repeatedly warned it would pull out of the project if the commission votes to adopt the recommendation, as the company cannot pass down to its stockholders costs rejected by the commission.
Consumer advocacy groups argue transferring risks to stockholders could prompt proper management of the project, ultimately saving costs.
“As often as Georgia Power has been wrong, the staff has been right” argues Kurt Ebersbach, a senior attorney with the Southern Environemental Law Center. He says its time for the commissioners to listen to their staff.
Steam rises from Plant Vogtle’s cooling towers for units 1 and 2, built in the 1970s and 1980s, while construction of units 3 and 4 continues. (Handout photo)
Georgia Assistant Attorney General Daniel Walsh says if the commissioners find completing the project uneconomic, they could disapprove Georgia Power’s costs and schedule. Georgia Power would then have to decide whether to cancel the project or not.
In the past, Georgia Power has said failure by the commission to approve all their proposals could provide a basis for othe company to abandon the project.
“Georgia Power has framed this as an all or nothing demand, but it doesn’t have to be,” argues Ebersbach. He says the decision to proceed with the project lies with the company, which is now trying to box commissioners “into their all or nothing framework.”
Consumer advocacy groups see canceling the project as the only viable way out of the nuclear debacle. They argue cost overruns ratepayers have taken on, project delays, environmental concerns and the falling prices of natural gas are reasons enough for the commissioners to pull the plug on Vogtle.
For the Mayor of Waynesboro, Gregory Carswell Jr., cancelling Vogtle would be a backward move that would result in the loss of close to 800 jobs created in Burke County. “Vogtle is good for our well being here,” he says adding that the local economy has been boosted 40-50%.
Give Georgia Power a blank check
The commissioners could approve all of Georgia Power’s proposals, giving the company a blank check to continue with construction. Staff warned in their testimony that approving all the costs could “preclude the ability” of future commissions to disallow unreasonable costs.” A yes on Georgia Power requests could give way to additional cost overruns on the project, staff warned.
“The overwhelming amount of evidence for the commission to consider points towards making decisions that are protective of customers,” says Sara Barczak, program director at the Southern Alliance for Clean Energy. She argues such a decision could potentially dump more costs on customers.
Stan Wise, chairman of the state Public Service Commission, plans to step down after a vote on whether to continue the nuclear expansion at Plant Vogtle. Wise is a strong supporter of the Vogtle project. AJC FILE PHOTO
In a recent radio interview, commissioner Tim Echols suggested lowering the profits Georgia Power would get from the project. Consumer advocacy group, Georgia Watch, also recommends the commision lowers the company's profits as a condition of continuing the Project.
The decision on Vogtle was initially set for February, but it was sped up by the commission in early December owing to impending Congressional tax reforms. Georgia Power CEO Paul Bowers told PSC chair Stan Wise that a vote before December 31 would enable the company to take advantage of tax benefits associated with the current tax rate before it expires. Bowers was responding to commission chair Stan Wise's question on the implications of the tax reforms.
The company still believes keeping the project going would be in the best economic interest for customers.
“There is no easy choice here; this is an important policy decision that will affect all Georgians for the next 60 to 80 years,” Georgia Power noted in their report to the commission.