By Drew Kann, The Atlanta Journal-Constitution —
Customers will feel a cumulative 10% increase in their monthly electric bills
State regulators voted Tuesday to pass most of the tab for Plant Vogtle’s two new nuclear reactors on to Georgia Power customers, providing a final answer to the question of who would pay for the project’s budget overruns and triggering another major rate increase early next year.
The plan, approved unanimously by the five elected members of the Georgia Public Service Commission (PSC), allows Georgia Power to charge ratepayers for $7.56 billion of the $10.2 billion the company ultimately expects to spend completing the nuclear plant near Augusta. The company and shareholders of its parent, Southern Company, will absorb the remaining $2.63 billion of the project’s construction costs.
The costs approved Tuesday come on top of a monthly surcharge Georgia Power customers have shouldered for years to pre-pay for Vogtle’s expansion and on top of recent hikes approved by the PSC.
The PSC’s vote means residential customers will face another increase of about 6% in their monthly bills after Vogtle’s second new reactor, Unit 4, comes online. Georgia Power has said Unit 4 will be complete by the end of the first quarter next year.
The average Georgia Power residential customer’s monthly bill already jumped about 3.2% this summer, when Vogtle’s first new reactor — Unit 3 — entered operation and $2.1 billion in construction costs were placed into rates.
Tuesday’s vote means ratepayers on Georgia Power’s standard residential plan, the company’s largest group of customers, will feel a cumulative 10% increase in their monthly bills as a result of Vogtle’s capital and construction costs. For the average residential customer using 1,000 kilowatt-hours of electricity a month, that means an increase of roughly $14.38 to their monthly bills, according to calculations by The Atlanta Journal-Constitution based on Georgia Power rate tables.
District 4 Commissioner Lauren “Bubba” McDonald, the only commissioner still in office who voted to approve construction of the new reactors back in 2009, defended the project before the final vote. Soaring costs at Vogtle and two nearly identical reactors that were under construction in South Carolina pushed Westinghouse — the original developer behind both projects — into bankruptcy in 2017. That same year, South Carolina pulled the plug on both of their reactors, but Georgia regulators repeatedly voted to push ahead.
“Yes, we’ve suffered bruises and we’ve suffered pain,” McDonald said. “But we’re also going to enjoy the benefits for the next eighty-plus years.”
The PSC’s staff has testified that the project’s enormous cost overruns have eliminated any economic benefits for ratepayers, who would have been better served if natural gas plants had been built instead.
The expansion of the plant near Augusta was originally supposed to cost $14 billion, but total spending by all partners involved in the project has now soared past $35 billion. The first new reactor, Unit 3, was completed more than seven years behind schedule. Earlier this year, Unit 4 appeared set to clear its final construction and testing hurdles with fewer hiccups, but a cooling component failure discovered this fall caused a fresh delay. Now, the reactor won’t enter service until early 2024, at least six years later than expected.
Georgia Power spokesman John Kraft said in a statement that the PSC’s final decision reflects “a balanced approach that recognizes the value of this long-term energy asset for the state of Georgia and affordability needs for customers.”
Observers of the long-delayed project had expected a bruising fight over responsibility for the reactors’ final tab. But approval of the deal that was voted on Tuesday appeared to be a foregone conclusion during hearings earlier this month.
After years of criticizing Georgia Power’s management of the project, the PSC’s public interest staff reached the $7.56 billion settlement with the company back in the summer. Several groups, including the Georgia Association of Manufacturers, the environmental organization Georgia Interfaith Power and Light (GIPL) and the consumer advocacy group Georgia Watch also signed on in support. While a few staunch opponents of Vogtle blasted the deal during hearings in early December, the parties involved in the settlement did not question Georgia Power executives about the plan.
This $7.56 billion tab does not account for the roughly $3.5 billion in financing costs Georgia Power customers have already paid over the last decade-plus through an extra charge on their monthly bills. That fee is set to go away once the second reactor is complete.
Adding in those financing costs, taxes and the cost of replacement fuel, the bill Georgia Power customers will ultimately cover for Plant Vogtle’s expansion is now $12.43 billion, according to calculations by the PSC’s staff.
Kim Scott, the executive director of Georgia WAND, a local environmental justice and anti-nuclear nonprofit, said the PSC’s decision will cause “another unreasonable financial hit to Georgia Power customers who have been consistently burdened with rate increases.”
Vogtle’s new units will provide a source of around-the-clock electricity without producing greenhouse gas emissions that trap the sun’s heat and are leading to global warming. As the first two reactors built from scratch in the U.S. in more than three decades, the project was also supposed to help revive the country’s faltering nuclear industry.
But that vision has not become reality. Instead, Vogtle’s delays and budget overruns have chilled the nuclear ambitions of other utilities.
While some have explored building new reactors, there are no other commercial nuclear plants under construction in the U.S., or any signed orders to build new ones.
The deal finalized Tuesday does includes some provisions to protect customers from the specter of further cost overruns.
After the vote, Georgia Power now has a hard deadline of March 31, 2024, to place Unit 4 into commercial service. If the schedule slips beyond that date, the company’s rate of return will be slashed to zero until it is complete.
If Unit 3 or Unit 4 suffer unexpected outages any time after their first year in service, Georgia Power will also have to prove to the PSC that the interruptions aren’t the result of engineering and construction errors or other mistakes. If the company does not meet that burden of proof, commissioners could order that it credit customers for the costs.
Georgia Power also agreed to expand its Income-Qualified Senior Citizen Discount program, which saves the average eligible customer $33.50 on their monthly bills, according to the Southern Environmental Law Center (SELC). Seniors in households with a combined income equal to or less than 200% of the federal poverty level were already eligible for the discount; now, customers receiving Social Security Disability assistance, Supplemental Security Income and customers who use the Section 8 housing voucher program will also qualify.
The changes are expected to expand eligibility to another 96,000 customers, the SELC has said.
Codi Norred, the executive director at GIPL, said in a statement that his group was pleased with the expansion of Georgia Power’s bill relief programs, but lamented that customers will “continue to pay heavily for Vogtle’s budget overruns.”
“After Vogtle, we hope the commission will double down on their support of cost-saving renewable options, like solar and battery storage.”
Copyright © 2023 The Atlanta Journal-Constitution
