News | November 15, 2017

SELC challenges Georgia Power’s request to charge customers more for Vogtle overruns

Georgia Power presented its case during opening hearings last week for why the Georgia Public Service Commission should approve its latest revisions to the project cost and schedule for the Plant Vogtle nuclear expansion. The revisions double the initial project cost and push the completion date back by another two years, making the expansion five years behind schedule and billions over budget. 

On the first day of the hearings, SELC filed a petition for declaratory judgment on behalf of Partnership for Southern Equity and Georgia Interfaith Power & Light. The petition asks the commission to turn down Georgia Power’s request, warning that the utility is attempting to shift additional financial risk to customers in order to shield its shareholders from the massive cost overruns.

“Customers deserve an accurate picture of what this momentous decision will mean for their electricity bills,” said Senior Attorney Kurt Ebersbach. “Accounting gimmicks aside, Vogtle is not the least cost option, and its completion in lieu of cheaper alternatives will burden customers for decades.”

Along with the PSC staff and other intervening parties, SELC had the opportunity to question Georgia Power’s witnesses on a variety of issues over the course of four days. Utility witnesses expressed confidence in their ability to meet new price tag and schedule, yet were unwilling to accept any blame or responsibility for the delays and cost overruns.

During the first panel, SELC Senior Attorney Kurt Ebersbach’ s questioning pushed back on Georgia Power’s assertion that the revised cost and schedule should be approved as reasonable given the major risks—all of which the utility took pains to acknowledge and emphasize—that make meeting the new cost estimate and schedule unlikely.

Mid-week, another important panel featured Executive Vice President for the Vogtle expansion, Mark Rauckhorst, who defended Southern Nuclear’s cost-to-complete estimate and argued that site operations have improved markedly since a new contractor, Bechtel, took over for the previous lead contractor, Westinghouse. Rauckhorst also claimed that Georgia Power had little knowledge of—or ability to control—problems plaguing the site under Westinghouse’s leadership, despite having hundreds of employees on site in an oversight capacity.

Ebersbach countered that the utility was well aware of the problems prior to Westinghouse’s bankruptcy and had the ability to correct them. Rauckhorst denied knowledge of a 2016 assessment of the now-abandoned V.C. Summer project performed by Bechtel. However, he acknowledged that Georgia Power was in regular communication with the South Carolina utilities about construction and engineering issues common to both sites. In addition, prior to V.C. Summer’s cancellation, Georgia Power had filed a report with the PSC arguing that the two projects were similarly situated because they were using the same technology, had the same contractor, and were addressing construction and design problems in the same way. 

The last panel featured testimony from Georgia Power executives that the project remains economically viable and beneficial for customers. The witnesses dismissed all potential alternatives, including solar, wind, demand-side efficiency measures, and even natural gas. In order to make alternatives look economically unattractive, Georgia Power added costs associated with cancelling Plant Vogtle to the price of each alternative. 

On the other hand, the utility omitted from its analysis the multi-billion dollar tax deduction that Georgia Power will receive if it cancels the project, which utility officials said will flow back to customers.  Ebersbach pointed out that, by failing to include such cancellation benefits, which would more than offset cancellation costs, Georgia Power was putting its thumb on the scale in favor of completing the units.

In the next round of hearings, scheduled for December 11th through the 14th, SELC and other interveners will have the opportunity to refute Georgia Power’s case.