Senate Bill 31 – Georgia Power’s prepay financing scheme

Sen. Don Balfour (R-Snellville) sponsored Senate Bill 31, which is now known as the Georgia Power tax. The controversial bill moved swiftly through both chambers and lander on Governor Perdue’s desk long before the session ended.

SB 31, more commonly known as the Georgia Power tax, forces the utility’s customers to pay $2 billion dollars beginning in 2011 for the financing of new nuclear reactors at Plant Vogtle. One billion of this Georgia Power tax is early profit for the company and approximately $500 million is the prepayment of taxes.

According to Georgia Power’s own estimates, consumers with an average monthly power bill of $100 will pay an extra $1.30 per month on their bill, and see that amount increase to about $9.10 per month by 2017. Unforeseeable construction delays at Vogtle mean monthly increases could be much higher.

What’s more, the monthly increases in electric bills we will all see are estimates – Georgia Power’s lowball estimates – and are subject to change with any delays the expansion at Votgle may incur.

For example, if weather delays a day’s work, we as ratepayers must still pay for the loss of time. Similar projects in Alabama and Florida saw the cost of construction rise exponentially once building was underway due to unforsseable delays.

Legislators, consumer advocates and conservative bloggers that opposed the bill claimed its passage was due to Georgia Power’s well-connected, persistent lobbyists. To help Sen. Balfour make the case for SB 31, the utility hired 70 professional lobbyists.

During the first weeks of the 2009 session they filled capital hallways and spent thousands on dinners, drinks, sports tickets and other events for legislators in hopes of buying “yea” votes.

The legislature overwhelmingly adopted this tax increase and early profit scheme in spite of testimony at the legislature and the Public Service Commission that this would harm consumers and cost Georgians hundreds of millions more.

In April, Govorner Perdue signe SB 31 into law. Senator Robert Brown (D-Macon) immediately filed a repeal.

Opponents of the bill included: Georgia Watch, AARP Georgia, Clark Howard and the conservative blog, Peach Pundit, among others.