A settlement agreement among Georgia Power, clean energy advocates, and state regulators’ staff could result in several billion dollars of costs being passed along to company shareholders for the beleaguered Plant Vogtle nuclear expansion project.
The Public Interest Advocacy Staff of Georgia Public Service Commission and Georgia Power reached an agreement on Wednesday that, if approved by the agency’s five-member board, would likely result in Georgia Power customers not being saddled with $2.6 billion in overrun capital costs for the Plant Vogtle expansion. Still, the agreement could lead to the average utility customer paying $14 per month for the two-phase expansion that is expected to be completed in early 2024.
The agreement would resolve a dispute over the estimated $10.2 billion in capital expenses Georgia Power is expects to spend by the time the two nuclear reactors are supposed to be fully operational.
The settlement calls for capping the maximum amount paid by Georgia Power customers at $7.6 billion, just north of the $7.3 billion threshold agreed to in 2018 by state regulators and Georgia Power. Under the 2018 order, the company could request from the PSC the right to recover above-cap expenses from ratepayer if commissioners deemed the charges to be reasonable.
The deal signed on Wednesday said that future expenses above $7.6 billion will be covered by Georgia Power and its parent company, Southern Co. and their shareholders.
The average Georgia Power household has been paying $5 more per month since Unit 3 went online this summer. This week’s settlement would likely tack on another $9 to utility bills once Plant Vogtle’s Unit 4 is generating power.
The agreement would need to be approved by the Georgia Public Service Commission before its terms become official. At a soon-to-be scheduled hearing, PSC staff, Georgia Power, and other interested parties will get a chance to present expert witnesses, while the public will be able to voice opinions on the nuclear expansion located southeast of Augusta.
The landmark agreement was reached after years of tense debate over the merits of building two nuclear reactors as costs and timelines have nearly tripled from the original price tag of $12 billion and targeted completion of the two reactors in 2016 and 2017.
The commission’s Chairman Jason Shaw praised the staff for doggedly monitoring the project over the years.
“With the semiannual Vogtle Construction Monitoring reports and the countless hours of analysis on this project, I assume there has been more evidence presented in this docket than in any docket in PSC history,” Shaw said. “The culmination of construction on this historic project marks the expansion of clean energy production for another 60 to 80 years here in Georgia.”
Georgia Power and other Vogtle promoters trumpet the benefits of nuclear power as a provider of a reliable and zero-carbon energy supply for generations to come. A number of utility analysts and clean energy and consumer advocates have long argued that the project’s benefits will not outweigh the ballooning costs and that customers will be stuck with an unreasonable cost in the long haul.
The proposed deal comes at a time when Georgia Power’s 2.7 million customers have begun footing a $10 billion tab for fuel cost and electric base rate adjustments.
Over the last decade, Georgia Power customers have spent an average of $100 a year on Vogtle Units 3 and 4 before either reactor generated the first kilowatt.
The Southern Environmental Law Center, on behalf of Georgia Interfaith Power and Light and Partnership for Southern Equity, agreed to a settlement with Georgia Power that they say will provide much-needed bill relief from Vogtle’s construction costs and for seniors and lower-income Georgians.
The agreement was also signed by consumer watchdog Georgia Watch and trade group Georgia Association of Manufacturers.
When Vogtle’s construction was certified in 2012, the utility company’s officials estimated the project would cost customers an extra $9.60 a month.
“While project delays and overruns do mean Georgians will be paying for this project for decades, Georgia Power agreed to significantly lower the construction costs they were expected to pass on to customers,” said SELC attorney Bob Sherrier.
As part of the settlement, Georgia Power agreed to about a 50% expansion of energy efficiency programs and also offered up to 96,000 additional low-income seniors to participate in a program that would reduce their monthly bills by an average of $33.50.
“This settlement is a significant step in advancing our pursuit for energy equity and democratizing energy for many Georgians,” said Partnership for Southern Equity Chief Equity Officer Nathaniel Smith. “The reality is many Georgia families continue to choose between keeping their homes cool or putting food on the table.”
Vogtle experienced a major delay in its early stages when its contractor Westinghouse Electric filed for bankruptcy in March 2017. Technical and regulatory obstacles, periodic worker shortages during the pandemic, and a long legal dispute with contractors have led to other setbacks.
Georgia Power, which owns 46% of Vogtle, is regulated by the PSC. The nuclear project is also co-owned by Oglethorpe Power Corp., Municipal Electric Authority of Georgia, and Dalton Electric, which sued Georgia Power over Vogtle’s cost overruns.
Construction and financing costs for Vogtle surpassed $34 billion earlier this year, as Georgia Power and Southern Co. pushed to have one reactor completed by summer and the other one in early 2024.
This story comes to GPB through a reporting partnership with Georgia Recorder.
