Georgia Power Seeks $235M Boost To Pay For Nuclear Plant
Georgia Power Co. is asking regulators to let it raise annual rates on customers by $235 million a year as the utility seeks to pay for its share of a huge nuclear project.
The company says the proposal would raise bills for a typical residential customer by about $4 a month. That would mean about a 3% increase over the current typical monthly residential bill of $122.73.
The unit of Atlanta-based Southern Co. filed the request with the Georgia Public Service Commission on Tuesday. The five-member regulatory body is scheduled to vote on the request by November.
Georgia Power owns 46% of two new nuclear reactors at Plant Vogtle, east of Augusta. The shareholder-owned utility currently projects it will spend $8.8 billion in capital costs and $3 billion in financing on the project, numbers that could rise as construction delays continue to mount.
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.
Georgia Power projects an overall 10% increase in rates, with 3.4% already having happened. Public Service Commission staff members estimate the typical customer will pay $854 in financing costs alone by the time the Vogtle reactors are finished.
The staff has signaled it will dispute how much Georgia Power can collect, saying in recent testimony that the company should get $125 million.
“Ratepayer bills would be significantly lower under staff’s interpretation,” a staff member and two consultants wrote in testimony filed June 7 in a related Vogtle proceeding.
The project is now projected to cost more than $26 billion for all its owners, including Georgia Power, electric cooperatives and municipal utilities. Most electric customers in Georgia, except those in the northwest corner of the state served by affiliates of the Tennessee Valley Authority, will have to pay for the plant. The Jacksonville Electric Authority and some cooperatives in Alabama and Florida are also obligated to buy electricity from Vogtle.
Ultimately, the five elected Republican commissioners will decide what costs Georgia Power can charge for. However, the current rate proposal covers $2.38 billion in costs that commissioners in 2017 approved as prudently spent. The proposal is actually a rate increase of $369 million, but it’s being offset by a $134 million reduction in the separate rate that the utility is charging to cover construction costs and financing.
The company wants the commission to pre-approve the rate increase to take place the month after unit 3 begins commercial operation.
In its rate filing, Georgia Power said new rates would begin Feb. 1, assuming a January start date. However, Public Service Commission staff earlier this month projected the first new reactor wouldn’t begin running until June 2022, adding at least $2 billion to its cost.
Spokesperson Jeff Wilson said that the monthly rate increase would be roughly similar even if Vogtle doesn’t start operations in January.
The reactors, approved in 2012, were initially estimated to cost a total of $14 billion, with the first new reactor originally planned to start generation in 2016. Delays and costs spiraled, especially after the main contractor filed for bankruptcy in 2017. The company and regulators insist that the plant is the best source of future clean and reliable energy for Georgia, despite new delays and costs announced in recent months.
The first new reactor is 98% complete.
Southern Co. recorded a $1.1 billion loss related to Vogtle in 2018, but it’s not clear who will pay for the latest overruns. Georgia Power has said it may seek regulator approval for customers to pay for the latest $800 million in spending.
Georgia Power projects that it will take 60 to 80 years for customers to pay for the new reactors.
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