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WHITE ELEPHANTS Senate Bill 31 would provide safety net for Georgia Power

In 1974, Georgia Power broke ground on nuclear reactors at Plant Vogtle near Augusta, embarking on a nuclear odyssey that would nearly bankrupt the company.

Almost 15 years later — and after several delays and environmental hurdles— the project’s construction costs ballooned from $680 million to a staggering $8.4 billion. And it wasn’t until then that Georgia Power could begin to recoup the cost from ratepayers.

Now, as the state’s largest utility moves forward on two new reactors at Plant Vogtle estimated at $6.4 billion, the first in nearly 30 years, the company wants to cover its assets — and it’s enlisted the assistance of a phalanx of lobbyists and a controversial legislative plan of attack.

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The state Senate today passed a bill 38-16 that would allow Georgia Power to begin collecting fees from customers to help pay for two proposed nuclear reactors prior to their construction. (The Senate Press Office included in its release about the bill’s passage this hilarious photo to the right of the bill’s sponsor, state Sen. Don Balfour, R-Gavelville.)

The bill now moves to the House, where Jim Galloway of the AJC says lawmakers are generally warm to the idea.

Supporters of the bill say it’ll save the utility — and in turn, customers — money in the long run.

But many lawmakers and consumer groups oppose the move because they say it sidesteps the Public Service Commission  — and partially exempts big business and industrial customers from the increased rates.

For an excellent rundown of the controversial legislation, view my esteemed colleague Scott Henry’s post.

After the jump, Dave Williams of the Atlanta Business Chronicle reports some lawmakers’ thoughts about the bill.

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Senate Bill 31 — to allow Georgia Power to charge Georgians upfront for the construction cost of two planned nuclear reactors — was expected to come up for a floor vote today. But it didn’t even make it onto the debate schedule. Why was this?

Plant Vogtle

Word is, because the votes aren’t there — which would mean Sen. Don. Balfour, R-Snellville, the powerful Senate Rules chairman, hasn’t yet managed to persuade several of his fellow Republicans to support his mucho controversial bill.

Some of the hold-outs, I was told, include Pres. Pro Tem Tommie Williams, R-Lyons, and Sen. Dan Weber, R-Dunwoody, a usually conscientious pol who isn’t afraid to break party ranks. So I asked Weber.

“I’ll probably support the bill,” he told me. “My concern is that Georgia is facing a substantial shortfall in [electrical] generating capacity.”

Fair enough, but Georgia Power has said it would build the two nukes even if the bill doesn’t pass.

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Georgia voters have never gotten terribly excited over our Public Service Commission elections, partly because the issues involved — franchise agreements, amortization schedules, telecommunication service areas — are often so complex that few people understand them. But that’s why we elect these folks, to six-year terms, no less: to make difficult decisions about very complicated matters involving huge utilities.

Plant Vogtle near Augusta

That’s why no one I’ve talked to can figure out why the Senate is handling legislation to enact a fundamental change in the way Georgia Power bills its customers — meaning all of us. Sponsored by Rules Committee chairman Don Balfour, R-Duluth, SB 31 motored through committee Wednesday, even though some of his fellow Republicans indicated they didn’t completely grasp what it would do.

So, what would it do? Put simply, it would require Georgia Power customers — again, you and me — to begin paying for two new nuclear reactors at Plant Vogtle as they’re being built. This is a huge departure from how the billing process has worked in past decades. For all previous projects:

1. The utility gets approval for a capitol project from the PSC
2. The utility builds the capitol project on its own dime
3. The utility raises our rates to recoup its investment

This process has worked fairly well so far. Now, however, Georgia Power is pushing to get its money up front. I suppose you can’t blame ‘em; Vogtle’s two original reactors nearly bankrupted the company. Construction began in 1974, but endless delays caused by numerous redesigns and shifting federal regulations meant the plant didn’t go into operation until 1989. Costs ballooned from a projected $680 million to a staggering $8.4 billion — money the company couldn’t begin to recoup for a solid 15 years until the project was completed. (more…)

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