Tom Crawford – The Georgia Report
Georgia Power is one step closer to getting Public Service Commission approval of virtually all of the utility’s massive cost overruns on the Plant Vogtle nuclear project.
The PSC held a day-long hearing Tuesday on a stipulated agreement between PSC staffers and Georgia Power lawyers that settles the cost overruns and schedule delays in completing two additional reactors at Vogtle.
PSC members are scheduled to vote on the agreement Dec. 20 and they indicated Tuesday they will likely give it unanimous approval.
Georgia Power is attempting to have all of its cost increases declared to be “prudent” so that they can be passed along to ratepayers in the form of higher bills rather than being absorbed by the utility’s shareholders.
The proposed settlement not only provides that the $3.68 billion already spent on the project will be declared prudent, but another $2 billion worth of construction is also considered to be prudent even though that money hasn’t been spent and the construction work hasn’t been done yet.
The settlement represents nearly a total cave-in by the PSC to Georgia Power’s executives and lawyers.
PSC staffer Steven Roetger disclosed that in the initial negotiations between the two sides, the staff was looking for “a range of about $800 million for disallowance.” In other words, shareholders would have had to eat that amount in cost overruns.
But by the time the final settlement was hammered out, any financial punishment of Georgia Power had almost completely disappeared.
The settlement now provides that Georgia Power’s shareholders will be out a total of $115 million, while ratepayers will have to make up $2.2 billion on the project.
“As we have it today, that’s the difference — $115 million to $2.2 billion,” said Liz Coyle of Georgia Watch in her questioning of a panel of PSC staffers and Georgia Power executives. The panel members didn’t disagree with her statement.
While the PSC members are all conservative Republicans, they got some pushback at Tuesday’s hearing from a local tea party leader, Debbie Dooley.
To approve the Vogtle settlement, Dooley said, “would be rewarding irresponsibility and failure. Georgia Power will make a guaranteed profit off that.”
“You should not allow them to profit from failure,” Dooley said. “Please don’t reward failure by granting Georgia Power everything they want.”
While the hearing was in process, the Atlanta Tea Party sent a mass email to its members urging them to contact PSC members prior to Dec. 20 and oppose approval of the settlement.
“Tell them not to allow the Georgia Power Grinch to steal Christmas from utility customers by making customers assume all the risks for mismanagement of the construction project,” the email said.
PSC staffers defended the settlement’s final form.
“This benefits the project by taking the spotlight off of prudence and putting it instead on completion of the project,” said staff attorney Jeff Stair.
William R. Jacobs, a nuclear engineer who’s been monitoring the project for the PSC, noted that the settlement does provide for financial penalties if the two reactors aren’t in operation by the end of 2020.
“After December 2020, the company will suffer significant reductions in their rate of return,” Jacobs said. “I think that’s a very major benefit.”
Copyright © 2016 The Georgia Report
Source: The Georgia Report