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Nov. 6 - Critical hearings begin on ftuture of Georgia Power Nuclear Power Plant Vogtle Project

Category: Manufactuing

Coastal Empire News Staff Report

November 6, 2017 - Following today's opening hearing in Georgia Power Company's 17th Semi-Annual Vogtle Construction Monitoring Report proceeding, several Georgia groups, including the Southern Environmental Law Center, are urging the Georgia Public Service Commission (PSC) to reject the utility's request for approval of its revised cost and schedule for building two new nuclear units.

Georgia Power is asking the PSC to approve as "reasonable," a price tag that is nearly double what was originally projected, for a project now five years behind schedule and more than $6 billion over budget. Georgia Power has threatened to cancel the project if the Commission does not give its blessing to the new costs and schedule.

The Southern Environmental Law Center has intervened in the proceeding on behalf of Georgia Interfaith Power and Light and the Partnership for Southern Equity, they state, and today filed a petition for declaratory ruling, making the case that approving the project under the current circumstances would force customers to pick up the tab for the increased costs.

Under Georgia law and past orders of the Commission, Georgia Power must bear the risk that it may be unable to recover its cost overruns, if and when the units are ever complete.

"Georgia Power customers, especially individuals and families struggling to stay on top of their monthly bills, should not be forced to bear this enormous financial burden for decades to come," said Nathaniel Smith, Chief Equity Officer at Partnership for Southern Equity. "After years of paying for units that have yet to—and may never—deliver a kilowatt-hour of electricity, Georgia consumers need the bill relief that solar and energy savings programs have been shown to deliver."

Georgia Power has already collected $2 billion dollars from its customers to "finance" these projects but over half of those funds are actually profits for the monopoly utility – money now added to customers’ monthly bills.  “Now, Georgia Power wants to stick 2.5 million customers across the state with the additional costs to keep the project alive,” they state.

The groups advocate that replacing the Plant Vogtle nuclear expansion with new investments in solar power and energy efficiency would be less risky, more affordable, and more than up to the job of powering Georgia's economy.

"We are concerned about the moral implications of throwing billions more of Georgians' hard earned dollars on this wasteful project, which will raise electric bills for years to come and dampen our state's potential for economic growth," said Rev. Kate McGregor Mosley, Executive Director of Georgia Interfaith Power and Light. "Greater investments in energy efficiency can directly benefit our low-income citizens, for whom utility bills can constitute a substantial and overwhelming share of monthly income."

Georgia Power wants its customers, rather than its shareholders, to pay for all of its cost overruns. The groups are asking the PSC to force Georgia Power and its shareholders to shoulder the burden resulting from its ballooning budget.

"If Georgia Power wants to continue down this risky path, it should not be allowed to shift risk away from its shareholders and make customers bear the entire burden of this boondoggle," said Kurt Ebersbach, Senior Attorney for the Southern Environmental Law Center. "The prudent way forward is to cancel, or at least pause, this risky project—and to invest in energy saving programs and local solar power that will lower bills for Georgians."

The Southern Environmental Law Center is celebrating its 30th anniversary this year. With nine offices across the region (Charlottesville, VA; Chapel Hill, NC; Atlanta, GA; Charleston, SC; Washington, DC; Birmingham, AL; Nashville, TN; Asheville, NC; and Richmond, VA). 

Georgia Power’s Testimony Today

But, Georgia Power and the other owners of the Vogtle 3 & 4 project (Oglethorpe Power, MEAG Power and Dalton Utilities) today presented their unified recommendation to continue construction of the project . Georgia Power filed the recommendation to move forward with the Georgia PSC on August 31 as part of the 17th Vogtle Construction Monitoring (VCM) Report.

The recommendation was supported by all of the owners and based on the results of a comprehensive schedule, cost-to-complete and cancellation assessment which was launched following the bankruptcy of Westinghouse in March.

Their recommendation to go forward is based on the results of a comprehensive schedule, cost-to-complete and cancellation assessment that was prompted by the bankruptcy of Westinghouse and the subsequent rejection of the fixed-price contract, the owners state.  “That is why we are here – to consider the impact of the Westinghouse bankruptcy,” stated Georgia Power’s president, in a statement before the hearings began.

“The Owners are unified in our recommendation to move forward with construction and believe we have identified the risks upfront and provided the information necessary to support the recommendation. We also understand that this is a complex and difficult decision and it is ultimately the Commission's decision on whether or not we will move forward with this project.

“Based on all factors considered, completing both units represents the best economic choice for customers and preserves the benefits of carbon-free, baseload generation for our state.  Assessments of the project included a robust economic analysis; evaluation of various alternatives including abandoning one or both units or converting the units to gas-fired generation; and assumptions related to potential risks including future payments from Toshiba, availability of production tax credits and the extension of loan guarantees from the Department of Energy (DOE) that reflect the new cost projections.

“Since the filing, we have mitigated some of the risks that further strengthen the recommendation, including;  

“On September 29, we announced an agreement with the DOE for a conditional commitment of approximately $3.6 billion in additional loan guarantees – this illustrates continued federal support of new nuclear. Understand this is a loan through the Federal Financing Bank, it is not a grant. The federal government is allowing us to access a cheaper source of funding versus a commercial financing option.

On October 2, we announced the first payment of $300 million ($137 million for Georgia Power) from Toshiba and, on November 1, another $77.5 million was paid pursuant to the payment schedule. 100 percent of these funds will be used to benefit customers. This is a positive indication that Toshiba intends to fulfill its commitments to our customers by paying the $3.686 billion parent guarantee.

Construction has continued uninterrupted at the Vogtle site over the past six months with all the Owners working together to maintain the project's momentum following Westinghouse's bankruptcy. Southern Nuclear, the nuclear operating subsidiary which operates the existing units in Georgia, is now the project manager at the site. Global construction firm Bechtel is managing daily construction efforts. Progress is steady and evident, illustrated by multiple recent achievements such as the placement of the final steam generator for Unit 3 on October 10 and, at the end of September, more than 1,800 cubic yards of concrete was placed in the Unit 3 containment vessel – a 71-hour pour which illustrates significant efficiency improvements,” he said. 

© Copyright 2017 Coastal Empire News, publisher of SavannahBusinessJournal.com, DublinBusinessJournal.com and BrunswickBusinessJournal.net. All Rights Reserved. www.CoastalEmpireNews.com

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