Christmas traditionally is celebrated Dec. 25 for most Georgians. This year, one of our wealthiest corporate citizens may be celebrating that holiday a little earlier.
That’s because the executives and shareholders of the Georgia Power Co. are in line to receive a Christmas gift worth more than a $1 billion when the members of the Public Service Commission convene their regular meeting Oct. 19.
Here’s how: Georgia Power is currently building two nuclear reactors to go with the two units already in operation at Plant Vogtle near Waynesboro.
When the PSC approved the nuclear project in 2009, Georgia Power said it would cost $6.1 billion to pay for its share of the construction and projected that the first unit would be generating electricity by 2016; in other words, right now.
Over the intervening seven years, however, Georgia Power has run up more than $1.7 billion in cost overruns while building the units. The nuclear plant that was supposed to be providing power by now isn’t even close — the project is currently 39 months behind schedule and could slip even farther behind.
Normally, when a business screws up this badly on a major project, it suffers some financial consequences. That’s as it should be; no one should be rewarded for fouling up like this.
In fact, that’s what happened when Georgia Power built the first two nuclear units at Plant Vogtle in the 1980s and ran up even bigger cost overruns. After holding numerous hearings, the PSC disallowed $1.1 billion in project spending and prohibited Georgia Power from passing along the costs to its customers.
That probably won’t happen now. The current members of the PSC ordered their staff to work up a settlement with Georgia Power’s attorneys in which the utility would likely pay only a token fee — perhaps $40 million or $50 million — for the Vogtle overruns.
Georgia Power in turn would be allowed to pass along the entire $1.7 billion in cost overruns to its customers in the form of higher electricity bills. The company would get off virtually scot-free for its horrendously bungled project.
The PSC scheduled a vote on this settlement to take place Oct. 19, at a time when people would be paying more attention to a presidential race than to an obscure regulatory proceeding. The commissioners are expected to vote for the settlement drafted by their staff with little or no public input.
“The Vogtle project is so bad that it cannot be defended in public, and the commission and the company must resort to secret negotiations to work out how the commissioners can maximize recovery for Georgia Power and yet not look so bad themselves,” said Jim Clarkson, an energy consultant who’s been observing commission activities for many years.
The driving force behind this generous Christmas gift for Georgia Power is Commissioner Stan Wise. That’s not surprising; back in 2012, Wise provided the key vote to allow Georgia Power to charge off $3.2 million in disputed expenses just two days after receiving $10,000 in campaign contributions from the law firm that represents the utility in rate cases.
Georgia consumers should be very concerned about this PSC generosity, even those who are not Georgia Power customers. The utility giant owns 45.7 percent of the Vogtle project, but the rest is owned by Oglethorpe Power, MEAG Power and the city of Dalton. Their customers are also going to suffer from the cost overruns.
In an ideal world, the PSC would at least hold some public hearings and submit Georgia Power’s executives to cross-examination before approving a sweetheart deal like this one.
PSC Chairman Chuck Eaton says that will happen. “It could go in a number of different directions, but I don’t see any scenario where there aren’t hearings,” Eaton said.
Eaton is only one vote among five commissioners, however. It wouldn’t be difficult for Wise to cobble together a majority who would approve the giveaway to Georgia Power without hearings — a Christmas gift that would come right out of your pocket every time you pay your power bill.
The PSC members are Eaton, Wise, Lauren “Bubba” McDonald, Doug Everett and Tim Echols. If you want to protect yourself from skyrocketing power bills, you might want to contact them soon.
Tom Crawford is editor of The Georgia Report.