Utility eyes ratepayers for building costs

The Florida Times-Union

May 7, 2008
By Jake Armstrong, 
The Times-Union

ATLANTA - Slim or not, there's a chance that Georgia Power customers may foot the bill for two new nuclear reactors proposed for the utility's Plant Vogtle nuclear facility near Waynesboro before the 1,100-megawatt units are built. 
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David Ratcliff, CEO and president of Georgia Power's parent firm, the Southern Co., broached the idea of asking the Georgia Public ServiceCommission's permission to bill customers for construction costs for the reactors ahead of their construction during the company's earnings conference call last week.

But a decision on whether to do so has yet to be made, said Jeff Wilson, spokesman for Georgia Power.

"We are reviewing what other states have done in terms of financing, but we have not made a decision on that issue at this time," Wilson said.

Critics of the proposal, which would nearly double the amount of power Plant Vogtle can generate by 2016, assert that the PSC could be clearing the way for cost overruns if it were to allow Georgia Power to collect money ahead of construction.

"If they are allowed to, there is no - or a very small - incentive to keep the costs down," said Neill Herring, a lobbyist for several environmental groups aligned against the expansion.

Without the ability to collect ahead of construction, the company might keep a more watchful eye toward construction costs because the money is essentially coming out of investors' pockets, Herring said.

"If you remove that safeguard that provides they will just start spending wildly," Herring said.

Wilson said Georgia Power had no comment on critics' claims.

State law does not appear to prohibit investor-owned companies from collecting construction costs beforehand, but the commission has not allowed the practice since the early 1990s, said Bill Edge, spokesman for the PSC.

Other states, Florida among them, have changed laws that previously barred the practice.

The Florida Legislature nixed such a provision in 2006, and the Florida Public Service Commission has scheduled hearings in September to hear cases in which Florida Power & Light and Progress Energy seek approval on plans to bill customers ahead of construction, said Cindy Muir, the Florida agency's director of public affairs.

Georgia Power expects the cost of the two nuclear reactors will be unveiled this week, Wilson said.

An independent evaluator is analyzing bids for multiple methods of generating additional power. The company would then select the bid it prefers, and submit it to the PSC in August.

Since 2006, Georgia Power has had PSC approval to collect up to $51 million in permitting and licensing costs for exploring nuclear generation as an option for generating additional power, Wilson said.

Georgia needs to add about 1,000 megawatts a year in additional generation to meet demand, Georgia Power estimates.

The proposal comes during an upswing of interest in nuclear power.

Commercial energy companies are evaluating options to build 22 reactors at 16 different sites nationwide, according to the federal Energy Information Administration.

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This story can be found on Jacksonville.com at http://www.jacksonville.com/tu-online/stories/050708/geo_276172951.shtml.