Kempner: Georgia Power’s nuclear tower teeters; EMCs ‘concerned’


Our bumbling aspiration in Georgia to build more nuclear power is looking suspiciously like that wooden block game, Jenga.

You know, the one where you take turns pulling out a block at a time, hoping not to topple the teetering tower.

How many pieces can be pulled out before Georgia Power’s nuclear expansion at Plant Vogtle metaphorically collapses and takes with it billions of dollars in consumer money?

The few remaining blocks left at the project’s base look shaky to me. (Well, except maybe Georgia Power’s eagerness to continue with a project the state ensures will be delightfully profitable for the power company even though Vogtle is billions of dollars over budget and years behind on completion.)

Small community power systems across the state may be the next blocks to be yanked out of the last nuclear plant still under construction in the U.S.

If you happen to notice what just happened across the border in South Carolina, you’ll know what I’m talking about.

With costs piling up and no end in sight, two South Carolina utilities recently announced they will abandon a nuclear construction project almost identical to the one Georgia has underway at Vogtle.

After years of problems, ballooning costs and the bankruptcy of the main contractor, one of the two co-owners on the Plant V.C. Summer expansion got cold feet and fled. Which immediately caused the project’s main owner, SCANA Corp. to announce it wants to call it quits, too.

SCANA officials say they couldn’t find anyone willing to join them on keeping the project alive, which I take as a hint of just how shaky demand is for attempting new nuclear power generation in the U.S.

The resulting political gyrations involved in this will be as grotesque as what I look like on the dance floor. SCANA is asking state regulators to force its customers to pay billions more in costs (and profits for SCANA) for 60 years for something they didn’t get.

Comparing fruit

Some elected members of the Georgia Public Service Commission rushed to put distance between South Carolina’s project and the Vogtle one they green lighted and showered with love.

“It’s like apples and oranges,” Commissioner Doug Everett said, according to my colleague Russell Grantham. 

PSC chairman Stan Wise pounded out a statement highlighting “the dissimilarities of these projects.”

This is ironic, because just last year, Georgia Power stressed to the PSC just how similar the two projects are. (That served Georgia Power’s interests at the time because it wanted the regulators to give the company essentially the same sweetheart deal that South Carolina regulators had given SCANA.)

A consultant for the Vogtle team concluded the project is “sufficiently similar to Summer Units 2 and 3 so that one could reasonably compare construction outcomes. This is proven by the fact that there are many similarities in the EPC contracts, generally the same primary plant equipment suppliers, similarities in construction milestone dates, similarities in construction contractors, and evidence that GPC and SCE&G have been and continue to collaborate on the design, construction, and training on these projects.”

Here’s a few more similarities: Both projects suffer soaring costs and stretched timetables. Also last week, Southern disclosed figures suggesting the total price of Vogtle may be close to double the original forecast. And the first juice won’t flow from a new reactor before February 2021 at the earliest, it said, more than a year later than the previous target.

A bunch more players

There really are differences between the Georgia and South Carolina projects, though. One of the most important is that there are a bunch more players involved in — and at risk on — the Vogtle expansion.

And those are the blocks anyone wondering about the future of nuclear expansion in Georgia should be eyeballing.

(Building nuclear plants is generally a group project to mitigate the massive risk. Because who would be so nutty as to try to do it on their own?)

Georgia Power is managing partner on Vogtle, with just under 50 percent of an ownership stake in the expansion. But also in the mix with almost a third of the ownership is Oglethorpe Power, which represents dozens of community electric membership corporations in Georgia. Most are at risk on this project, too.

The Municipal Electric Authority of Georgia, owned by bunches of small city power systems across the state, has nearly a quarter of the Vogtle ownership. And the city of Dalton has a small piece of the project.

Every one of those players has a different comfort (or fear) level on sticking with Vogtle. I suspect leaders of EMCs may be among the most nervous.

“They are very concerned and prepared to urge a pause,” I was told by Gary Miller.

He’s president of GreyStone Power Corp, one of the largest EMCs in Georgia, with nearly 113,000 customers in several counties including Paulding, Douglas and South Fulton.

EMC leaders aren’t taking any action until they get new cost estimates from Georgia Power and consultants later this month, Miller told me. But all the EMCs “are concerned about the impact on their members through rates.”

Short-term, the impact on GreyStone’s residential customer rates is likely to be the same whether Vogtle is killed or completed, Miller said. But the costs will linger decades longer if the project is completed, he said.

Rates could rise three percent every year for eight years to cover the project’s growing price, he said. That’s a total increase of more than 25 percent.

And no one really knows how much higher Vogtle’s price tag will go.

Get why leaders of some small utilities might have the heebie-jeebies?

Bubba on the case

Lauren “Bubba” McDonald, who sits on the PSC and has supported the nuclear project, told me he recently met individually with leaders of all entities that own Vogtle. Apparently he wanted to get a more complete read than what he was hearing from Georgia Power. He also wanted to make sure everyone was in the loop about what might be ahead.

“I don’t want my EMC friends out there to feel rate shock in 2021 — if this comes online — with no advance notice,” he said.

Some other utilities limited their exposure to Vogtle early on.

MEAG, the body representing city utilities, sold rights (and cost responsibilities) for two-thirds of the project’s first 20 years of power to PowerSouth in Alabama and JEA in Jacksonville, Fla. That’s according to Marietta’s mayor, Steve “Thunder” (fun, right?) Tumlin, who is on MEAG’s board.

“We spread the risks,” he told me.

If the Vogtle expansion gets killed, “it would hurt, but not kill” the Marietta system, Tumlin said. Customer power bill rates might go up “a few percentage points.”

So far, he said, the consortium of Vogtle owners has “steadfastly stood together and is not panicking.” But they have to be convinced it makes sense to stick with the program.

Otherwise?

Jenga!

MYAJC.COM: REAL JOURNALISM. REAL LOCAL IMPACT.

AJC Unofficial Business columnist Matt Kempner offers you a unique look at the business scene in metro Atlanta and beyond. You'll find more on myAJC.com, including these columns:

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