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Columns Tom Baxter

Another indictment in South Carolina’s nuclear fiasco, as Vogtle lumbers toward completion

By Tom Baxter

People in South Carolina turn their lights on and off the same way people in Georgia do. But over the past four years, the two states have diverged dramatically in their relationship with the utilities which produce their electricity.

In Georgia, there’s been significant grassroots reaction to Georgia Power’s plans for dealing with the coal ash problem at its plants. There was a hearing last week in the now 10-year-old case in which the utility is charged with improperly charging ratepayers with fees to cover the soaring costs of its nuclear project at Plant Vogtle. Federal regulators are talking about increasing scrutiny of the way over-budget and way late nuclear expansion project.

There’s little about the way these problems are being handled that’s different from the way they would have been a decade ago. In South Carolina, on the other hand, three top executives involved in a nuclear project nearly identical to the one at Plant Vogtle have pleaded guilty to fraud charges, and a fourth was indicted last month on charges that could result in 20 years in prison and a $5 million fine. The state’s largest utility has changed hands, and the cozy relationship between regulators and regulated has been roughly shaken.

Plans to expand Plant Vogtle in Georgia and the V.C. Summer Plant in South Carolina were announced within a month of each other in 2008. They were to be the first commercial nuclear projects since the Three Mile Island accident in 1979. Both projects involved the construction of two Westinghouse AP1000 reactors, a new design which Westinghouse claimed would eliminate many of the delays and cost overruns which had plagued previous nuclear projects. 

This didn’t turn out to be the case, and Westinghouse went bankrupt in 2017. That’s when the two states were set on different paths. South Carolina Electric and Gas and Santee Cooper, the owners of the Summer Plant, pulled the plug on the project, shouldering rate payers with an enormous debt for no return, but avoiding even more billions down the road. The closure also ignited the attention of federal prosecutors, who have so far charged two executives from Westinghouse and two from SCE&G with fraudulently misleading the public and regulators about how bad things were at the project.

Georgia went the other way. The Public Service Commission voted to allow Georgia Power to go forward with the project, to be completed by Bechtel, under the terms of a contract which carefully limits the industrial giant’s liability for any future cost overruns. 

After the Summer fiasco, the Charleston Post & Courier did a deep dive into why one project survived and the other didn’t. It concluded that Georgia did a better job of monitoring problems at Vogtle, while lax oversight allowed Summer’s problems to fester. (It should be noted, however, that the PSC went against the recommendation of its staff when it went forward with the project.) The story also noted that Georgia Power wielded more political power than either of the utilities involved in the Summer project. Santee Cooper is a state-owned utility, which increased the pressure to cut its losses when the true extent of the Summer fiasco became known.

“Ultimately, Vogtle’s story shows how money and political power triumphed over incompetence, at least so far,” reporter Tony Bartelme wrote

Four years on, “at least for now,” remains the operative phrase.

Since 2017, cost estimates at Vogtle have continued to rise, and the anticipated start-up dates for the project have been repeatedly pushed back. The pandemic added a new roadblock, but the project was already years behind schedule. The two reactors were supposed to begin operation in 2016 and 2017, at a cost of $14 billion. They are currently supposed to open in the second quarter of 2022 and the first quarter of 2023. The total cost may top $28 billion.

In the long run, the biggest reason the South Carolina project was cancelled and Georgia’s wasn’t is that, with a much smaller base of ratepayers, they couldn’t afford any more financial risk, while in the opinion of some regulators at least, Georgia could. What has happened since shows the South Carolina utilities’ decision, however painful, was the right one for that state.

It was estimated when the Summer project was cancelled that South Carolina ratepayers would be paying 18 percent more for the next four decades. At that time, the cost to Georgia’s much larger base of ratepayers was an additional 5 percent. Since then there have been estimates the cost to ratepayers could be as high as 12 percent. So ratepayers in Georgia are still better off than those in South Carolina. At least for now.

Tom Baxter

Tom Baxter has written about politics and the South for more than four decades. He was national editor and chief political correspondent at the Atlanta Journal-Constitution, and later edited The Southern Political Report, an online publication, for four years. Tom was the consultant for the 2008 election night coverage sponsored jointly by Current TV, Digg and Twitter, and a 2011 fellow at the Robert J. Dole Institute of Politics at the University of Kansas. He has written about the impact of Georgia’s and Alabama's immigration laws in reports for the Center for American Progress. Tom and his wife, Lili, have three adult children and seven grandchildren.

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4 Comments

  1. David C. Kyler September 13, 2021 5:11 pm

    There’s little doubt that gross incompetence is overcome with political clout, especially when the public is paying for millions in Vogtle’s cost-overruns and delays, while those making the mistakes are rewarded for them with guaranteed financial returns. It’s tragic that flagrantly exploited energy customers and voters cannot defend themselves due to the onerous dominance of corporate interests in Georgia’s policymaking.Report

    Reply
  2. Bruce Kay September 14, 2021 9:47 am

    The GA legislators are such unabashed whores for the money they take from GA Power for favorable
    legislation, they don’t even try & hide it .😒Report

    Reply
  3. Dr. Gus B Kaufman Jr. September 14, 2021 11:33 am

    And their refusal to line the coal ash pits and to clean them up, and their dragging their feet on stopping coal burning, all show flagrant disregard for anything but money and power.Report

    Reply
  4. Daniel C White September 15, 2021 7:02 am

    Georgia Power RULESReport

    Reply

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