A bill now before the Georgia House of Representatives would provide the long-term benefits of nuclear power to the state of Georgia, as well as specific savings to Georgia Power customers on the proposed construction of two new units at Plant Vogtle.
Senate Bill 31 would allow Georgia Power to recover financing costs during construction for two new nuclear units at Plant Vogtle.
Georgia Power projects a need for 35 percent more electric generating capacity over the next 10 years. Although renewable energy and energy efficiency will play an increasing role, energy demand in Georgia continues to grow, and Georgia utilities must add additional generating capacity to meet that need.
Nuclear energy is our nation's largest source of emission-free electricity. The new units at Plant Vogtle would take years to construct, providing as many as 3,500 jobs during construction and 800 permanent jobs once they are completed.
If financing costs are recovered during the construction of these two units, Georgia Power customers will save $300 million by eliminating charges for "interest on interest." The cost of the plant will be phased in over a longer period of time and the total rate increases required to pay for the plant would be reduced from 12 percent to 9 percent.
In addition, the in-service cost of the plant is reduced by nearly $2 billion, which will reduce customer bills over the remaining 60-year life of the plant.
Equally important, perhaps more so to customers, is the fact that Georgia Power has one of the best bond ratings among utilities in the United States. Recovering financing costs during construction will help preserve those credit ratings, which would save more than $100 million annually for consumers. Strong credit ratings lower the interest costs not only for nuclear projects but also for all other utility investments.
SB 31 will not affect the Georgia Public Service Commission's authority to approve the construction of the nuclear units and certify the cost that Georgia Power is allowed to recover. The PSC will monitor the construction of the nuclear units and Georgia Power will be able to recover only those costs that the PSC deems are prudently incurred. SB 31 only affects the recovery of the related financing costs while the units are being constructed.
In addition to other utilities in Georgia that already have the ability to recover financing costs during construction, other states around Georgia — Florida, South Carolina, Louisiana, Virginia and Mississippi — have passed similar legislation. The benefits available to customers in these states should also be available here in Georgia.
The growing volatility of natural gas prices and the uncertainties around the costs of coal, including the potential effects of carbon regulation, support the need to add more nuclear generation to our fuel mix. SB 31 supports the ability to maintain nuclear generation as part of the state's overall energy policy.
Georgia Power will continue working with the PSC to ensure Georgia has a diverse supply of energy, including nuclear energy, to provide the reliable, affordable electricity our state needs.
Ann Daiss is vice president, comptroller and chief accounting officer for Georgia Power.