Plant Vogtle: Georgia’s shame
By Guest Columnist PATTY DURAND, president of Cool Planet Solutions
Georgia Power has the only nuclear plant under construction in the United States, which I call “Georgia’s Shame.” It is shameful that the timeline the utility provided to regulators, investors and the public – those of us paying for this plant – is now six years behind schedule. And it is shameful that the utility’s cost estimates for this plant were off by a shocking 100%: The original cost estimate for the two new units was $14 billion, and 2021 costs are near or at $30 billion.
This is federal level money spent in one state on one power plant.
And what are we getting for all this money? These units will produce a relatively small 2,100 megawatts of electricity annually. Georgia regulators allowed Georgia Power to pursue an energy solution that is nine times more expensive than necessary. The pursuit of Plant Vogtle over the past 12 years happened at a time when renewables are at record low prices and natural gas is four times cheaper than nuclear.
When all is said and done, Georgians are likely to be paying the highest electric bills in the country, and we are already between fifth and eighth place in the U.S. for high bills, according to different rankings.
Georgia Power and the Georgia Public Service Commission like to say that electric rates are 15% below the national average, but that’s not true. Given that Georgia is the sixth-cheapest state in the United States and the cost of living in Georgia is 20% below the national average, the fact that rates are no longer below the national average and will rise more sharply still due to Plant Vogtle impacts should concern everybody.
Furthermore, customers pay bills, not rates. Georgians’ bills continue to ratchet up relative to the rest of the country. And that was before Plant Vogtle, the most expensive power plant ever built on earth.
Why has the PSC allowed the most expensive power plant ever built on earth to happen here, a state in the bottom 10 in terms of wealth and income? And can anything be done about it now?
Before we answer that, let’s set the table:
The PSC, a state agency with five commissioners elected by voters, has given Georgia Power a dream boat of profits for 12 years, including the following:
- A blank check on construction costs. There is no limit to how expensive this project can go;
- Authorization to put Construction Work in Progress (CWIP) into rates. This means that Georgia Power customers are paying in advance for Vogtle costs prior to delivery of any electricity. If you move, or die, you or your family paid for something you never received;
- A financial scheme that allows Georgia Power to profit handsomely from project delays. So far Georgia Power has earned over $6 billion just from the delays of their own project.
Now that we understand the setting, here are three steps that should be taken if we are to prevent this from happening again. And it will happen again unless we act to stop it, because why not? Building expensive things is how Georgia Power makes the most profit. These are the three steps:
- Disallow Georgia Power from placing all nuclear construction costs onto our bills, and share rate increases more fully between customer classes.
When the first new nuclear unit comes online, likely sometime in 2022, construction costs will be placed into rates, though not equally among customer classes. The majority of costs will go to residential rates. The Georgia PSC has the choice of putting 100% of these costs into rates, none of the costs into rates, or a portion into rates, and the commission can decide how much those costs are spread between customer classes;
- Voters should punish commissioners for allowing this to take place by ejecting them from their seats.
Every Georgia election includes at least one, and sometimes two PSC commissioners. There are always competitors making promises to reduce our power bills. You can be sure that no one is worse for keeping rates affordable than any commissioner already in that seat. They should not be rewarded with re-election. Vote them out.
- The Georgia Legislature should fully fund a separate Consumer Utility Counsel (CUC).
Most states, including Georgia in the past, have a separate office mandated to protect consumers. For decades, the CUC, a division of the Governor’s Office of Consumer Protection, represented Georgians in cases before the PSC. However, the CUC was defunded in 2008 during the Great Recession. Although the state is flush with tax revenues and has passed tax cuts several times since then, including $140 million in cuts just this year, this division was never restored.
In 2009 Georgia Power and the nuclear industry promised a new day. Because of streamlined changes in the licensing of nuclear plants, new unit designs, and the advent of modular construction, Georgia Power said it would deliver Vogtle units Nos. 3 and 4 “on-budget and on-time.” Yet here we are again, in the same place as we were when Plant Vogtle unit Nos. 1 and 2 went vastly overbudget.
This outcome was absolutely foreseeable. It is especially egregious in the Southeast, where more than $50 billion in failed nuclear power plants dot the landscape and damage the wallets of citizens in one of the lowest-income areas in the country.
Georgia Power is a monopoly granted by the people of Georgia through their state Legislature. In exchange for having no competition and a guaranteed profit, the utility agrees to serve the public interest with regulatory oversite. Going forward, perhaps it is time to examine how a competitive market will better serve the public interest.
Note to readers: Patty Durand, in addition to serving as president of Cool Planet Solutions, has 15 years of experience educating consumers about energy