Meet the third parties trying to shape the Vogtle expansion and keep rates low

By: Abraham Kenmore

The voices debating when and how much of Plant Vogtle’s Units 3 and 4 expansion costs can be passed along to consumers in the form of electric bills include more than just the Georgia Public Service Commission and Georgia Power, which owns much of the plant. It also includes third party groups. 

As the Public Service Commission holds hearings on the construction, third party groups can receive legal status as intervenors, allowing them to cross examine witnesses, introduce evidence and request information alongside PSC staff and representatives of Georgia Power. Some support the expansion, others oppose it, others still hope the entire project will be scrapped.

 Among the intervenors are:

  1. Southern Alliance for Clean Energy, which says investments in renewables would have been more cost effective
  2. Georgia Watch, a consumer advocacy group concerned with increased electric bills for already burdened Georgians
  3. Nuclear Watch South, a group that opposes nuclear power on environmental grounds
  4. Southern Environmental Law, which represents environmental justice groups like Partnership for Southern Equity and Interfaith Power and Light
  5. Georgia Association of Manufacturers, which supports the project but wants to manage rate increases
  6. Resource Supply Management, an energy consultant firm for corporate customers 

The Plant Vogtle Units 3 and 4 expansion costs are now estimated at almost twice what they were originally were. The greatest concern for most of these intervenor groups is how the expenses from Plant Vogtle Units 3 and 4 will be passed along to ratepayers – especially those with high energy burdens, measured by the percentage of income spent on energy bills. 

“Georgia has some of the highest energy burdens in the country,” said Bryan Jacobs, Southern Alliance for Clean Energy solar director and state liaison for Georgia. “Anything over six percent is defined as unaffordable. And we have a number of areas of urban and rural in the state, where the average is double that, and there are some individual locations in excess of 20 percent.”

Cooperatives and municipal utilities also own a stake in the Plant Vogtle expansion.

“We’ve got people paying bills all across rural Georgia in excess of like a car note or a house note,” said Alicia Scott, Just Energy manager at Partnership for Southern Equity, which is represented by SELC. Monthly bills are expected to increase 13 percent “not only for Georgia Power customers but also for our (electrical membership cooperatives) and our munis, who buy the bulk of their energy wholesale from Georgia Power.”

Some of these costs have been on resident’s bills for years.

“We were particularly troubled that Georgia Power had gotten the legislature to approve the Georgia Nuclear Financing Act that created, for the first time, a mechanism in Georgia for the utility to charge their customers in advance,” said Liz Coyle, executive director of Georgia Watch. “People have been paying for these units on their power bill every month since 2011, and we’re still nowhere close to getting any power out of them.”

That bill was sunset in 2018, so future projects cannot use it without new authorization. In an email, Georgia Power spokesman Jeff Wilson said the NCCR tariff will save customers millions in the long run by recovering financing costs now.

Georgia Power’s rates will have to be approved by the commission, but their profit is determined then largely by what they spend, not their original projected cost of $4.4 billion. This means cost overruns can actually increase their profit, according to Kurt Ebersbach, senior attorney for SELC.

“It’s almost just assumed now that they’re going to get $7.3 billion, and I don’t understand why that should be the case, because that’s a 60 plus percent increase in project costs, and why should customers pay for that?” he said. “I think the company should have to absorb every penny over $4.4 billion and the financing cost associated with that, but unfortunately the commission has already made it unlikely that that will happen.”

Wilson said that the current capital cost for Georgia Power is $9.2 billion, and they have not sought approval of anything over $7.3 billion. He said there are protections in place that reduce the company’s rate of return for every month of delay, which reduces customer bills.

Georgia Association of Manufacturing has a particular interest in rates, as its industrial clients can face energy costs in excess of their labor costs. Unlike many of the intervenors, who range from skeptical to downright hostile to the project, they see the two new units as an important asset for the state. 

“We believe that there is a legitimate place in the generation mix for nuclear,” said Roy Bowen, president of GAM. “You only have to look as far as Texas or California to see some of the issues that come from an overreliance on any particular generating source.”

What a fair rate looks like varies among intervenors. Jacobs said that some industrial customers managed to avoid the bulk of nuclear tariffs, and hoped there could be some insulation for people at the lowest income levels. Charles B. Jones III, vice president and general counsel for GAM, said that residential customers are often more expensive to service than industrial clients, but after those costs are accounted for, he supports capital costs being split equally among different groups of customers.

Joining the process 

Costs haven’t been the only point of interest for some intervenors. 

Jim Clarkson, owner of Resource Supply Management, advises industrial, commercial and institutional clients on energy uses. He said he has been intervening in various cases since 1984, and does it in large part to get good information for his clients.

“I’m in all the Vogtle cases,” he said. 

Nuclear Watch South joined the process for the first time in 2013 and has participated on and off since, expressing opposition to the expansion in principle.

“We are an anti-nuclear organization, an environmental group, we are not a consumer protection group, just environment,” said Glenn Carroll, coordinator for Nuclear Watch South. “We were coming to terms with the fact that no one was really advocating in that forum as an intervenor to stop the project all together, that got our attention.”

Others, like SELC joined in 2017, when the contracting firm, Westinghouse, went bankrupt and the Public Service Commission decided whether the project should more forward or not. Despite staff warnings the project might not be viable, the PSC voted to move forward with the project. 

According to Wilson from Georgia Power, when the units are online Georgia Power will be 30 percent nuclear, 10 percent more than its current mix. But some intervenors say alternatives are also now much more viable than when the project began.

Jacobs said solar now costs about $1 a watt, or $2 billion dollars for an output equivalent to the new Vogtle units – although he also acknowledges that solar only operates about a quarter of the time while nuclear is almost always online. 

Difficulties

Almost all the intervenors highlighted the fact that it is difficult to actually impact the process as an intervenor. 

“You’re entering into the situation in a David and Goliath type scenario,” said Nathaniel Smith, founder and chief equity officer of Partnership for Southern Equity. “We are in a state of course where our private utility has a great deal of influence, both figuratively and literally.” 

Others compared the process to swimming up hill.

“Participation from the company, PSC staff, intervenors and customers is an important part of the process that ensures the Commission hears and understands all points of view,” wrote Wilson. “The open and transparent process in place helps inform all participants and allows the Commission to make the most informed decisions.”

But intervenors also hope that the way that rate increases are implemented can be influenced – implementing them over a longer period of time, for example, or disallowing certain expenses.

For many intervenors, it is also a chance to put people on the record, regardless of what the PSC does.

“This is one of the few opportunities to question company witnesses under oath about this project, to test their credibility, to see whether any of their claims about how things are going or whether things might get better, to see whether those materialize over time,” said Ebersbach. 

SOURCE: Augusta Chronicle

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