Georgia Power vs. the law of holes
By Lyle Harris
Georgia Power is likely to get another shot-in-the-arm after announcing plans to complete construction on those ill-fated nuclear reactors at Plant Vogtle near Waynesboro.
A more appropriate response to this epic boondoggle, of course, would be a swift kick in the pants. But don’t count on it.
The Georgia Public Service Commission (PSC) has scheduled hearings on November 6 to discuss the troubled project, Along with the Southern Company (Georgia Power’s corporate parent) and the smaller utilities that are partners on the Plant Vogtle expansion, there’s little reason to worry about some silly old hearings. While the PSC is ostensibly charged with balancing the interests of the utility with those of its customers, the scales are reliably tipped in Georgia Power’s favor.
The planned reactors at Plant Vogtle were supposed to be up and running by now but they’re only about one-third complete. A series of major snafus and setbacks (including the bankruptcy of Westinghouse Electric which designed and was building the reactors) has increased chances that Georgia households will be picking up more of the tab.
Bear in mind, Georgia Power and its project partners have already been collecting about $100 a year in construction prepayments from millions of its customers (including you and me). They were granted the authority to do so after the state legislature let the utility take our money in advance for an unproven, untested product. With lawmakers and regulators asleep at the switch, the cost of the Plant Vogtle expansion has more than doubled from $12 to $25 billion and the work is now five years behind schedule.
Now, the U.S. Department of Energy is planning to grant $3.7 billion in loan guarantees for Plant Vogtle. That’s in addition to the $8.3 billion the federal agency had already pledged for the project. (Remember the hysterical cries of “corporate welfare,” when the same federal loan guarantee program was used to spur development of renewable fuels? Solyndra anyone?)
Like many others, I have been openly critical of this project from the gitgo. It was rushed through the General Assembly with unseemly back-slapping and customary deal-making by corporate lobbyists. What’s been missing all along, unfortunately, is serious consideration or rigorous oversight by our elected officials.
As critics of my coverage have pointed out, the mind-blowingly complicated details involved in nuclear plant construction are not in my wheelhouse, and I completely agree. I’d rather split infinitives than atoms.
Although lacking in nuclear power bonafides, my family of humble Jamaican immigrants thankfully taught me the power of common wisdom. While chronicling this still-unfolding train wreck over the last eight years, some of my all-time favorite sayings have bubbled up, including:
“Don’t buy a pig in a poke” – Investing blindly on a nuclear construction design from Westinghouse – a design that has never been built anywhere in the U.S. – should have been our first clue that this project would devolve into a nightmare. What’s worse: this particular pig was bought in advance with Georgians’ hard-earned money so we won’t even be tasting any bacon for years to come – if ever.
- “Don’t throw good money after bad” (aka the Sunk Cost Fallacy) – Georgia Power’s decision to proceed full-speed ahead is rooted in the time-honored human impulse that often leads to pain and penury. Doubling down on a bad bet is a powerful urge that Georgia Power/Southern Company seem genetically unable to resist. I guess it’s easier when you’re gambling with other people’s money. Ours.
- “Obey the First Law of Holes” – It’s an immutable truth, right? If you find yourself in a deep, dark place of your own making, stop digging. Please. Granted, canceling construction of the Plant Vogtle reactors could cost more than $400 million and be an embarrassment of Biblical proportions. But changing course is a relative bargain compared to the billions it will cost to complete the project as originally planned. On top of that, a recent analysis by PSC consultants indicates the nuke reactors aren’t really necessary because of waning customer demand for electricity coupled with the falling costs of other fuels, such as natural gas and renewables.
(Note: I originally wrote this column several weeks ago but posting was delayed by computer problems. As it turns out, Steve Huntoon of RTO Insider, an energy trade newsletter, posted a very similar, far more detailed column that makes for great reading. Well struck, Steve!)