In 1974, Georgia Power broke ground on nuclear reactors at Plant Vogtle near Augusta, embarking on a nuclear odyssey that would nearly bankrupt the company.
Almost 15 years later – and after several delays and environmental hurdles – the project's construction costs ballooned from $680 million to a staggering $8.4 billion. And it wasn't until then that Georgia Power could begin to recoup the cost from rate payers.
Now, as the state's largest utility moves forward on two new reactors at Plant Vogtle – estimated at $6.4 billion and the first in nearly 30 years – the company wants to cover its assets and it's enlisted the assistance of a phalanx of lobbyists and a controversial legislative plan of attack.
Introduced by state Sen. Don Balfour, R-Snellville, Senate Bill 31 would allow Georgia Power to begin charging customers – you and me – in advance for the two new proposed nuclear reactors at Plant Vogtle. The bill passed the state Senate last week and now moves to the House.
What the bill proposes is a huge diversion from the typical process. In past decades, Georgia Power sought state approval before building a plant, built it on its own dime, and then recouped the cost by raising customers' rates.
According to Georgia Power, residential energy bills would rise $1.30 per month beginning in 2011. The following year, the average customer would see bills increase by $2.60 a month. By 2017, the average customer would pay an additional $9 a month – nearly $108 a year.
The bill has consumer advocates, Democrats, and even some Republicans crying foul. Georgia Power, a private company that operates as a regulated monopoly in the state, is asking customers, not shareholders, to shoulder the risk of what's basically a business investment that has the potential to once again balloon in cost.
Balfour, who says the concept was presented to him last fall by utility executives, claims it would save rate payers $300 million in the long run by allowing Georgia Power to avoid interest payments – and would prevent a "rate shock" to customers when the reactors start producing energy.
"I think it's a win-win-win," Balfour says. "I think it's great for Georgia. I don't see any losers in it."
But consumer advocates and some Democrats call the bill misleading, unfair and the wrong solution at the wrong time.
Consummate consumer advocate guru Clark Howard blasted the bill, saying the utility was "trying to pick your and my pocket." Libertarian blogger Jason Pye branded Balfour's legislation as "Georgia Power's poison bill."
"It's a bad big-government bill that's forcing consumers to prioritize Georgia Power's debt and financial obligations over our own," says Beth Malone, a spokeswoman for consumer advocacy group Georgia Watch.
Another part of the bill that might piss off consumers: Big business is exempt from the rate hike – a group that, unlike you, me and small-business owners, enjoys the service of lobbyists. After language was written into the bill that exempted big business from the rate hike, the group's lobbyists have been noticeably absent from the debate.
But perhaps the most serious problem with the bill is that the Georgia Public Service Commission – a body better prepared to handle such issues – is already considering the exact same proposal.
The commission, the state agency that decides how much you pay to heat your home or turn on your lights, is staffed by a team of experts in energy issues and financing. Those experts have raised questions over whether future consumers of Plant Vogtle's newly generated energy would be spared the expense incurred by current rate payers.
Or, as Sen. David Adelman, D-Decatur, warned his colleagues: "It is a bad idea to inject yourself into this system, substitute your judgment for that of five statewide elected officials, force them to engage in piecemeal ratemaking, and to do so without the background, without the special knowledge, and without hearing any debate."
The Public Service Commission is supposed to rule on the issue in 30 days.
"It doesn't really belong in the General Assembly," says Malone.
Balfour's response to that argument speaks to the power-grabbing move of his legislation: The commission, he says, was created by the General Assembly, and lawmakers have the authority to issue it directives.
But eleventh-hour changes to the bill allow the commission to retain a measure of control, Balfour points out. "The PSC still decides what rate of return Georgia Power gets," he says. "The PSC still decides whether they build this plant. And they can disallow any expense they think is not prudent."
Critics hope Balfour's bill will face additional scrutiny in the House. As CL went to press, two House committees were scheduled to discuss the legislation on Wednesday and Friday.
If passed, the bill would need Gov. Sonny Perdue's signature. Last week, the governor released an update about the state's energy plan that emphasizes the expansion of Plant Vogtle. Add to the equation that Perdue's chief of staff is a former Georgia Power executive, and you can rest assured that the governor is keeping tabs on the bill's progress.
Additional reporting by Scott Henry.
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