Less than a year after the Georgia Public Service Commission approved a several billion dollar cost increase at the troubled Plant Vogtle nuclear expansion project, utility shareholders revealed last week that the total project price tag has jumped upwards of $2 billion in capital costs.
This latest dose of unwelcome news comes less than two months after hearings concluded in the eighteenth Vogtle Cost Monitoring docket, proceedings that occur every six months to review the project cost and schedule. Witness testimony in that proceeding gave no hint that another major price increase was on the horizon.
The nineteenth Vogtle Cost Monitoring docket is slated to begin in late August, where additional questions about the project’s latest cost and schedule estimates can be expected.
On behalf of Partnership for Southern Equity and Georgia Interfaith Power and Light, SELC filed a letter at the commission yesterday, outlining significant concerns with the budget slip and urging the Commissioners to require that Georgia Power include more detailed information on project risks in future proceedings.
“With customers already on the hook for billions in cost overruns, this recent admission that the budget has slipped yet again, so soon after the last major cost increase, confirms that the Vogtle expansion project is riskier than ever,” said SELC Staff Attorney Jill Kysor. “With no cost cap in place, customers have no assurance that there won’t be more billion-dollar surprises for this project, which is now the most expensive in Georgia’s history.”
Southern Company, the parent company of Georgia Power, has pledged to absorb Georgia Power’s portion of the new cost increase, which amounts to $1.1 billion. According to the company’s presentation to investors, there are $350 million in financing costs associated with the new overruns. That amount will be capitalized and rolled into an account ultimately paid for by customers.
On top of that, Georgia Power will earn a profit on all of the equity-financed costs. In addition, Georgia Power is free to seek recovery of all or a portion of the new costs from customers down the road.
“This recent cost increase is further proof that the Public Service Commission’s ongoing review of the Vogtle project is failing to protect customers,” said Reverend Kate McGregor Mosley, Executive Director of Georgia Interfaith Power and Light. “When it comes to making energy decisions that will have long-lasting implications for our state, Georgians deserve a fair, transparent and inclusive process.”
SELC, Partnership for Southern Equity, and Georgia Interfaith Power and Light are challenging the Georgia Public Service Commission’s decision last year to continue the project despite billions in cost overruns. The groups charge that the approval violated state law and the commission’s own rules, and that it put the interests of Georgia Power shareholders above customers.
But Georgia Power customers aren’t the only ones who should be concerned about Vogtle; the billions in cost increases will be felt by Georgians statewide. Most of the state’s electric membership cooperatives and municipal electric utilities are also on the hook for the project, extending Vogtle’s economic burden to nearly all Georgia residents.
“Fairness must be restored so that customers are not left holding the entire bill while Georgia Power profits,” said Nathaniel Smith, Chief Equity Officer at Partnership for Southern Equity. “For an energy future that’s good for customers and not just for powerful utilities, Georgia’s energy planners must make decisions that serve the interests of all Georgians.”