$224M Georgia Power rate hike likely for nuclear plant
Georgia Power Co. customers are likely to pay another $224 million a year for the first of two nuclear reactors near Augusta.
The company says the proposal would raise bills for a typical residential customer by about 3%, or $3.78 a month on a bill of $122.73.
The rate increase would start after Unit 3 at Plant Vogtle begins generating electricity. The reactor is now supposed to go into service in June. Customers could be asked to pay substantially more once the fourth reactor begins generating power, now scheduled for sometime in 2023.
A $157 million rate hike, costing a typical residential customer $2.87 a month, is also set to begin on Jan. 1. That’s part of a three-year $1.77 billion plan approved by commissioners in 2019. Customers also are likely to see a third separate rate hike, to allow Georgia Power to cover higher fuel costs.
An agreement regarding the first of the new nuclear reactors was filed Wednesday by the company and Public Service Commission staffers who are tasked with protecting consumer interests. It recommends that the company get most of what it originally asked for. Commissioners, who plan to vote on a rate increase in November, aren’t bound by the agreement, but such deals are typically very influential.
Georgia Power owns 46% of the two new reactors at Plant Vogtle. The unit of Atlanta-based Southern Co. currently projects it will spend $9.2 billion, with another $3.2 billion in financing costs. Those numbers could rise as construction delays continue to mount.
The Vogtle reactors are currently projected to cost more than $27.8 billion overall, not counting the $3.68 billion that original contractor Westinghouse paid back to the owners after going bankrupt. When approved in 2012, the estimated cost was $14 billion, with the first electricity being generated in 2016.
Other owners include most Georgia electric cooperatives and municipal utilities. Florida’s Jacksonville Electric Authority and some other municipal utilities and cooperatives in Florida and Alabama are also obligated to buy the nuclear power. The Georgia Public Service Commission controls rates only for Georgia Power.
In a Thursday hearing, several witnesses called for delaying or reducing the proposed rate increase.
“Rate increases are never welcome, but the timing of Vogtle 3 could not be worse,” said Jeffry Pollock, a rate consultant who testified on behalf of the Georgia Association of Manufacturers. He proposed delaying part of the increase until the beginning of 2023.
Georgia Power’s 2.6 million customers have already paid more than $3.5 billion toward the cost of Vogtle units 3 and 4 under an arrangement that’s supposed to hold down borrowing costs. But rates are still projected to rise more as the nuclear reactors are completed. Public Service Commission staff members earlier estimated that the typical customer will have paid $854 in financing costs alone by the time the Vogtle reactors are finished.
The latest agreement would allow the company to collect the $224 million a year to pay for $2.1 billion in construction costs that commissioners have already approved as prudent under the deal. Georgia Power had wanted to collect $235 million a year to pay for $2.38 billion in spending, while the staff had originally proposed allowing Georgia Power to collect $125 million.
“Staff now believes that the stipulation is in the best interest of ratepayers and the commission,” staff analyst Steven Roetger said in Wednesday’s hearing.
Georgia Power would be able to declare the unit operational once it completes testing and any needed repairs. If the unit proves unreliable or doesn’t operate as much as expected after that, the staff and company agreed that the commission could order refunds when it reviews the remaining Unit 4 costs for prudency at the end of the project.
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Follow Jeff Amy at http://twitter.com/jeffamy.
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