U.S. Department of Energy to ease Plant Vogtle bills? Depends.
June 17, 2009 at 6:23 pm by Thomas Wheatley in NewsEarlier this year, Georgia Power made themselves a bunch of enemies with Senate Bill 31, a controversial piece of legislation sponsored by state Sen. Don Balfour, R-Snellville, that allows the utility to charge customers in advance for two new proposed nuclear reactors at Plant Vogtle near Augusta, Ga.
The bill’s proponents said the rate hike, which would cover the reactors’ financing costs, was necessary to build the costly white elephants. Consumer groups, libertarians, conservatives, liberals — hell, even senior citizens — fumed at the proposed tacked-on cost. Nonetheless, SB 31 passed, and starting in 2011 ratepayers will see an additional $1.30 each month on their energy bills. The monthly fee will roughly double every year, topping out at an estimated $9.30 a month — or $108 a year — in 2017.
Well, Uncle Sam might give Georgia Power ratepayers a little bit of a reprieve from those Plant Vogtle charges. The U.S. Department of Energy is set to bestow $18 billion in federal financing to four utilities that could boost nuclear energy production. And those Plant Vogtle reactors are reportedly on the federal agency’s shortlist.
From today’s Wall Street Journal:
Four power companies are expected to split $18.5 billion in federal financing to build the next generation of nuclear reactors — the biggest step in three decades to revive the U.S. nuclear industry and one that could vault the utilities ahead of some of the sector’s strongest players.
UniStar Nuclear Energy, NRG Energy Inc., Scana Corp and Southern Co. are expected to share a set of loan guarantees to be awarded by the Energy Department. The guarantees would enable the companies to start building the reactors as early as 2011, with the plants likely to come online by 2015 or 2016.
Emphasis added. Atlanta-based Southern Co., whose Ivan Allen Plaza headquarters is guarded by demon sentinels and circled by money-eating ravens, is Georgia Power’s parent company.
A spokeswoman for Southern Nuclear, the Southern Co. subsidiary that handles its nuclear portfolio, confirmed with CL that the proposed Plant Vogtle expansion is a finalist in the federal agency’s program. The DOE hasn’t set a date to announce the funding recipients, nor has it established the specifics for the loans.
But this is great news, right? Even a few billion bucks to cover Georgia Power’s estimated $6.5 billion stake in the project could go a long way, right, and eliminate the need for that rate hike? Not necessarily. It’s a loan, after all, not a grant.
If Georgia Power does receive a chunk of that $18.5 billion in federal loans, a spokeswoman says, the financing mechanism outlined in SB 31 would probably still be used, but the monthly cost to ratepayers could be lower.
If it’s selected, “[Southern Co.'s portion of the federal loan] will become part of the funds that we would use in the construction,” the Georgia Power spokeswoman says. “Instead of borrowing everything from the market, we would borrow it from the government. If we do get that, we anticipate the interest rate would be lower, which would mean the amount of money the customers would be required to pay back would be less.”
Granted, the federal government’s money is your money, so it might just be splitting hairs. Regardless, Georgians will still be kicking in some cash to pay for those two white elephants years before they ever turn on the switch.
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