Opinion: Ga. Power nuke plants a total loss

Here’s how bad things have gotten in Georgia Power’s attempt to build two new nuclear plants:

If we stopped construction of the two half-built nuclear plants immediately, writing them off as a complete loss, then started from scratch with construction of brand new natural-gas plants, we would be able to generate the same amount of energy promised by those two abandoned nuke plants.

We would also save ourselves $1.6 billion.

Moreover, that estimate from the professional staff and consultants at the Georgia Public Service Commission probably underestimates the savings, and by a large margin. It assumes that Georgia Power will be able to meet its promised new deadlines of November 2021 and November 2022. Based on its long history of blown schedules, that is a very large assumption indeed.

It becomes even more unlikely given that Southern Nuclear Co. — a sister company to Georgia Power — has now been forced to take over construction management of the project. Southern Nuclear is good at operating nuclear plants, but it has no experience in building them. As credit analysts for Moody’s warned, “We view nuclear plant construction as an activity well outside of Southern’s core competency of operating regulated electric and natural gas utility businesses.”

So if we add another two years to the most recent construction schedule — a conservative estimate, given history — then the savings generated by instead abandoning the nuke plants and going to other power sources would double to $3.3 billion, according to the PSC staff analysis.

Georgia Power, of course, wants to finish the plants anyway, assuring us that investing another $6 billion as its share of the completion costs would still be cheaper in the long run. Again, it’s impossible to put much faith in that pledge, given its track record.

One thing we do know: Completing the plants would be good for Georgia Power, because the company is guaranteed a percentage of the total cost as its profit. The longer the project takes to build, the more expensive it becomes, the more profit that Georgia Power makes.

The PSC staff report lays it out pretty plainly:

“Due to the delays in the project, the company will collect considerably more in profit over the entire lifecycle of the units from ratepayers than it would have had the project been completed under the original schedule. The profit the company will collect will increase from approximately $7.4 billion to approximately $12.6 billion.”

That’s a $5 billion increase in profit over the life of the plants, all of which is attributable to delays and cost overruns. No, Georgia Power and its partners didn’t do that on purpose. Nobody is even suggesting such a thing. On the other hand, it also hasn’t had a strong financial incentive to bring the project in on time or on budget. In fact, the PSC staff report is pretty harsh in its assessment of the project:

“The company failed to manage the project and its contractor in a reasonable manner … the company’s failure to manage the project in a reasonable manner resulted in repeated schedule delays and increases in actual and projected costs …”

It’s also important to note that when Georgia Power first brought the nuclear proposal to the PSC seeking permission to proceed, “the company emphasized that it would be an active manager of the project.” Now that it has all but collapsed, the company insists that it bears no responsibility for its failure, and wants no responsibility for any future failure.

So kill it.

Reader Comments ...

Next Up in Opinion

Opinion: Doctor sex abuse makes headlines again
Opinion: Doctor sex abuse makes headlines again

The latest story on doctor sex abuse is particularly horrifying. In a sentencing hearing this week, dozens of young women detailed the terrible consequences of Dr. Larry Nassar’s abuse as a physician for USA Gymnastics, the organization that governs competitive gymnastics and trains Olympics gymnasts. Young women testified of abuse and molestation...
Readers Write: Jan. 19

Perdue’s dodge on Trump comments cowardly I hope Georgians of all parties, races, and faiths give our junior Senator Perdue a figurative “whack upside the head” for his evident lack of backbone in objecting to President Trump’s “(expletive) countries” comment. Saying he did not hear it in a small meeting where almost...
Why is the left ditching the DACA compromise?
Why is the left ditching the DACA compromise?

It looks like a plan that would have allowed “Dreamers” to stay in the United States is off the table for the moment. Why are Democrats backing away from a compromise that would help those under the Deferred Action for Childhood Arrivals (DACA) program? A roundup of editorials Thursday takes a look at the issue. 1. Here’s why...
Will Democratic ideals get in the way of a fair decision for ‘Dreamers’?
Will Democratic ideals get in the way of a fair decision for ‘Dreamers’?

As the threat of a government shutdown looms, will the left stick with their vision for immigration, or compromise with Trump for the “Dreamers” sake? A roundup of editorials Thursday takes a look at the choice the left faces. 1. Democrats hitch their party to immigrants From Bloomberg: The commitment to the issue of immigration is...
Opinion: A year in, Americans are of two minds about Trump, both of them wrong

This week brought an update on President Donald Trump’s health from the White House physician. Trump is up 3 pounds from his last check-up but his “overall health is excellent,” said Navy doctor Ronny Jackson. He added that, at Trump’s request, he’d administered a cognitive screening test and confirmed, contrary to perceptions...
More Stories