By Kristi Swartz – E&E News
ATLANTA — A Georgia state senator has taken aim at the rising price tag of Georgia Power’s nuclear expansion project and wants safeguards to prevent such cost increases from happening again.
It is the second major pushback at the economics of Plant Vogtle this week.
State Sen. Chuck Hufstetler, a Republican from northern Georgia, introduced a bill that would limit the amount that Georgia Power can profit from the twin reactors, which are now several billion dollars above their original budget largely because of construction delays.
Hufstetler’s bill, S.B. 355, filed yesterday, also wants the Georgia Legislature to review a controversial law that served as the financial template for Vogtle. The bill would leave the current law in place but would exempt public and charter schools from paying a monthly tariff that contributes to the reactors’ financing costs.
The Legislature swiftly passed the Nuclear Energy Financing Act in 2009, arguing that customers would save money over time if they paid for the reactors’ financing costs as they were being built.
The law also sent a signal to Wall Street that the nuclear reactors had political support and, more importantly, a steady revenue and profit stream for Georgia Power.
Those financing costs have roughly doubled now that the reactors are five years behind schedule, causing many to question whether the law should be reviewed.
“We do need to come back to the Legislature before this ever happens again,” Hufstetler said in an interview with E&E News after filing his bill with the Georgia Senate Clerk’s Office.
Georgia Power spokesman Jeff Wilson said the utility was reviewing the bill’s details. The utility leans on the Georgia Public Service Commission’s recent unanimous decision to have the company finish the reactors under certain conditions.
Those include chiseling away the amount of money it can earn from Vogtle.
“The Vogtle expansion is key to ensuring that our state has affordable and reliable energy today that will support economic growth now and for generations to come,” Wilson said.
Hufstetler, chairman of the Senate’s Finance Committee, first talked about Vogtle and his desire to rein in costs earlier this month (Energywire, Jan. 16).
Meanwhile, consumer watchdog group Georgia Watch on Monday asked state utility regulators to reconsider their December decision to let Georgia Power finish the half-built reactors (Energywire, Jan. 23).
The organization argues that the Georgia Public Service Commission did not fully review the economic impact on Georgia Power and its customers when it set new conditions on the project. The PSC is set to review Georgia Watch’s request on Feb. 1.
Georgia Power and a group of public power companies are building two reactors at Vogtle in southeastern Georgia. Vogtle and a similar project in South Carolina were using Westinghouse Electric Co. LLC as their main contractor, but skyrocketing costs caused the company to go bankrupt last March.
The electric companies argued that nuclear would put emission-free baseload generation on the grid, and regulators favored the reactors to help diversify the state’s fleet.
Vogtle’s original price tag was $14 billion, and now its costs have ballooned to $27 billion, however.
Outside incentives have lowered that figure. Chiefly, Westinghouse’s parent, Toshiba Corp., has paid $3.7 billion to underwrite part of the project. Georgia Power’s 45.7 percent share, with Toshiba’s payment, is $10.5 billion.
The PSC staff argued that regulators should make Georgia Power and its parent, Southern Co., absorb several billion dollars of Vogtle’s cost increases. If that doesn’t happen, the staff said, then regulators should cancel the project because to continue would be uneconomical for customers.
Chief among concerns is that Georgia Power would be making an additional $5 billion in profit because the reactors are so far behind schedule.
It is that figure that also caught Hufstetler’s attention.
“It doesn’t make economic sense to me,” he said. “Let’s at least not make the ratepayers pay additional profit going forward.”
Hufstetler said he’s spoken with Georgia Power and is aware that the company’s arsenal of lobbyists, combined with it being an election year, may be a hurdle for his bill. He spent Tuesday and yesterday gathering bipartisan support for the bill. The co-signers include a number of committee chairmen.
Georgia Power also added two veteran lobbyists to its growing roster earlier this month, according to state government records.
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Source: E&E News