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Crawford: Power bill due years before first spark

POSTED: February 12, 2009 1:00 a.m.

It won't be a huge surprise to our readers when I note that state legislators are more concerned about the interests of corporate CEOs than the problems of ordinary Georgia citizens. That's the way the world works, whether we like it or not.

Even so, what our lawmakers are being asked to do for Georgia Power Co., the electric utility that has always had an outsized influence on state politics, is breathtaking in its enormity.

Georgia Power plans to add a pair of nuclear reactors to the ones already in place at Plant Vogtle near Augusta to generate electricity for future needs. The cost to Georgia Power of those new reactors is estimated at $6.4 billion.

So far, no problems. Georgia is among the fastest-growing states and at some point more electricity will be needed. You can make a case for the construction of new power plants.

Georgia Power, however, wants to start charging consumers for at least $1.6 billion of the cost of building those new reactors in 2011, six full years before the project is scheduled for completion and is actually producing electricity.

The company wants to add a surcharge to your power bill, starting at $1.30 a month in 2011 but compounding to $9.10 a month by 2017, for power plants that haven't been built, haven't received the go-ahead to operate, and won't generate a single kilowatt hour of electricity for at least six years.

If that sounds like a sweet deal for Georgia Power, it is. Most corporations that undertake a large capital project assign the costs and risks of that venture to their shareholders. If it succeeds, they make money. If it fails, they write it off as a business loss.

Georgia Power wants to save its shareholders all that risk and let the average Georgia homeowner assume it instead; if the project goes bad or the new reactors don't work, the money at stake would be those early payments from consumers.

Think about it this way: suppose you planned to buy a new automobile, but were told by the dealer you had to start paying for it now and you would get a vehicle that might or might not work six years from now. Anybody with common sense would say no to that proposition. But that's what Georgia Power expects our elected lawmakers to give them by passing SB 31.

We have seen this tactic before. In the early 1980s, when the utility was planning the first two nuclear units at Plant Vogtle, Georgia Power tried to get the General Assembly to approve the same "Construction Work in Progress" procedure that would allow the company to start collecting early from ratepayers.

Those initial nuclear units, we were told back then, would cost $660 million to build. By the time the nuclear generators were actually in operation, however, the cost had escalated to nearly $9 billion, 13 times higher than originally estimated.

If they're telling you that the new units will cost $6.4 billion, you can bet that the cost will have at least tripled by the time 2017 rolls around, with a corresponding increase in any "Construction Work in Progress" surcharge that has been added to your monthly bill.

"That's the bombshell of the session," said Sen. George Hooks, who has seen the legislative carnival in action for many years. "It's going to mean a huge rate increase for the people back home and they're going to be mad when they find out. Why are we doing this?"

While there is some uneasiness among a few legislators, there are powerful lawmakers working to please Georgia Power: Sen. Don Balfour, Senate Majority Leader Chip Rogers and Senate Majority Whip Mitch Seabaugh have put their signatures on SB 31. If the bill goes to the House, power brokers like Speaker Pro Tem Mark Burkhalter will be very sympathetic to it. If an adopted bill goes to Gov. Sonny Perdue, whose chief of staff is a retired Georgia Power executive, he very likely will sign it.

It's a great deal for Georgia Power and its shareholders. For the consumers who will get the tab, maybe not so much.

I am told by a veteran lawmaker that a prominent utility executive has been calling legislative leaders about SB 31 and asking, "Where's my hamburger?"

"They're asking us for hamburger," the legislator said glumly, "and they're going to give us a Whopper."

Tom Crawford is the editor of Capitol Impact's Georgia Report, an Internet news service that covers government and politics in Georgia. His columns appears Thursdays.



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