Regulators are considering another rate hike for Georgia Power

Regulators are considering another rate hike for Georgia Power

By Alice Barrett, Georgia Law News

This reporting is made possible through a partnership with WABE and Grist, a nonprofit, independent media organization dedicated to reporting on climate solutions and a just future.

This story also appeared in Grist and WABE

Georgia’s Public Service Commission is poised to raise electricity tariffs for most Georgians to cover the costs of building new nuclear reactors at the Vogtle power plant. Hearings begin next week on the latest bill increases for Georgia Power customers.

As the commission prepares to vote, its own election remains in limbo due to a Voting Rights Act lawsuit. A federal appeals court recently issued a ruling in this case.

The first of two new nuclear reactors at the Vogtle plant came online earlier this year, and Georgia Power has announced the second is scheduled to come online early next year. Construction took years longer than planned and cost more than double the original budget.

If the PSC approves the rate increase, it would take effect after Plant Vogtle Unit 4 becomes operational next year and would represent the fifth electric bill increase for Georgia Power customers since Jan. 1, 2023.

Long-awaited hearings

Construction of the new reactors at the Vogtle plant began in 2009, with an expected price tag of $14 billion and an expected opening date of 2017. In the more than a decade it took to build the units, the Costs more than doubled, with an estimated total of over $30 billion in one year.

Georgia Power co-owns the Vogtle project with other power generation companies, so the company is not responsible for the total cost of financing and building the new reactors.

But Georgia Power owns the largest share. By the end of construction work on the second reactor, Unit 4, the company expects construction costs to be more than $10 billion. And it is permitted to pass on to its customers any costs that the PSC deems appropriate and prudent. Advocates and staff have long expected lengthy hearings once Plant Vogtle is finished to comb through project spending and determine what was prudent and what wasn’t — and therefore exactly what costs customers will have to pay.

“I think it’s a decent deal in terms of the ultimate dollar amount that they came to,” said Bryan Jacob of the Southern Alliance for Clean Energy, which did not sign the deal. “It’s a little unclear how they got there.”

Jacob called it “problematic” that the settlement occurred without the usual extensive back-and-forth in the public records that characterizes PSC proceedings. Other critics of the deal were more blunt.

“Throughout the 14-year project history of the Vogtle plant, these commissioners have declined to review cost overruns … because they have stated that they would examine costs very closely at the end of construction as part of the so-called precautionary measure,” said Patty Durand, the is running for a seat on the commission and will testify as an expert witness next week. “And now we are at the end of the process. And now they won’t.”

During next week’s hearings, PIA staff advisors will testify and present evidence to support the agreed agreement. In their written witness statement submitted in October, they admitted significant mismanagement in the construction of the Vogtle power plant.

“The project was marred by the known risks as well as inappropriate and imprudent management decisions, and the result was impact and disruption that ultimately resulted in significant delays and cost increases in essentially all phases of the work,” wrote Reza Nikain, Mark Cohen and Robert Strahle of JS Held, a construction consulting firm, in her statement.

Their statements and those of other experts retained by the PIA staff also break down the specific project costs into “prudent” or “prudent” and produce total amounts consistent with the deal at hand.

Parties involved in PSC proceedings often enter into agreed-upon agreements such as this, although in recent cases this has occurred only after extensive public testimony and cross-examination. The commission typically approves them with little to no changes, which PSC observers expect will be the case this time.

“I take it as a fait accompli,” Jacob said. “The Commission will most likely support the agreement as submitted.”

Jacob, for his part, said he would push for a relatively small change to the agreement. For years, Georgia Power customers have paid a fee on their monthly bills, called Nuclear Construction Cost Recovery, to cover financing costs for the project. However, according to Jacob, a certain type of electricity tariff used primarily by large industrial companies was exempt from the tax, meaning residents and small businesses were already paying significantly more for Plant Vogtle than larger companies. He said he would ask the commission to redress this disparity in distributing the final Vogtle costs.

Durand said she plans to testify against what she called a “secret deal” but also expects the commission to approve it.

Elections pending

It is not clear when Georgians will next vote in a PSC election.

The five members of the commission must each live in certain districts, but are elected by voters nationwide. That ballot measure sparked a lawsuit from a group of black voters in Atlanta. They argued that this diluted their votes and left a majority-black district unable to elect the representative of its choice.

The lawsuit alleged it was a violation of the Voting Rights Act. Last year, a federal judge agreed and halted elections for two commissioners scheduled for November 2022.

But last week, the 11th U.S. Circuit Court of Appeals reversed that decision.

“It adds distress and insult to injury,” said James Woodall, one of the plaintiffs. “We are already not allowed to elect candidates by choice. And now the 11th District is essentially telling us, ‘Hey, so bad, so sad.’”

Georgia’s foreign minister’s office did not respond to inquiries about election planning. Commissioner Tim Echols, whose re-election campaign against Durand was suspended by last year’s court ruling, declined to comment on the appeals court decision, as did a PSC spokesman.

Woodall was frustrated that the appeals court did not address the question of whether or not discrimination occurred, but rather questioned the proposed remedy through district-specific elections. The decision states that this proposal strains the concept of federalism, or separation of powers between the national and state governments, “to the breaking point.”

“Plaintiffs’ novel proposal is that we dismantle Georgia’s statewide PSC system and replace it with an entirely new district system,” Judge Elizabeth Branch wrote on behalf of the three-judge appeals court panel. “But we’ve never gone that far.”

The decision fits into a larger pattern that has seen courts “chisel away” at the Voting Rights Act over the past decade, said Alicia Hughes, the interim executive director of the Emory Center for Civil Rights and Social Justice.

“Unfortunately, this decision is not surprising,” she said. “And I wouldn’t expect it to be repealed.”

But because PSC elections are held nationwide, this is also an unusual case, Hughes said, less clear-cut than the racist gerrymandering decisions that have forced Georgia, Alabama and other states to redraw their congressional boundaries. The recent elections of Senators Jon Ossoff and Raphael Warnock, both Democrats, who received significant support from black voters, showed that the candidates chosen by those voters can win statewide races, she said.

A central point of contention in the PSC case was whether it was an electoral disadvantage based on race, which the Voting Rights Act prohibits, or a partisan preference, which the courts have found permissible. Hughes said it’s important not to blur the distinction between the two.

“I would rather split hairs and ensure that minorities in the elected government can elect representatives of their choice,” she said.

Woodall said he and his co-plaintiffs are considering the possibility of a possible appeal.

“This is not the end. And we will not give up our fight because the rights of Black voters are critical to protecting democracy,” he said. “We are already seeing the impact of not having access to this franchise. We’re talking about Plant Vogtle, we’re talking about rates, rate increases, we’re talking about utility rates and the ability for people across the state to be able to afford their utilities.”

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