Atlanta-based Georgia Power, a unit of Southern Company, recently won approval from the Georgia Public Service Commission to pass along to consumers big cost overruns for the utility’s troubled and unfinished nuclear expansion at Plant Vogtle near Augusta. / AJC
Photo: MATT KEMPNER
Photo: MATT KEMPNER

Georgia Power outlines $1B in proposed rebates after fed tax overhaul

Georgia Power said this week it will pass along future expected savings from the federal tax overhaul to ratepayers.

The utility estimates the Tax Cuts and Jobs Act will lead to about $1.2 billion in rebates and other benefits in the coming years. The plan still requires approval by state regulators.

Georgia Power said the average customer who uses about 1,000-kilowatt-hours per month could see about $70 in refunds through 2019.

Georgia Power currently spends $50 million per month on the project. In March 2017, Vogtle’s lead contractor, Westinghouse Electric, filed for bankruptcy. The project was already three years behind schedule and more than $3 billion over budget. Georgia Power’s Paul Bowers argues the project presents “long-term benefits to customers.” Critics have fought against Vogtle's expansion for years, citing cost and safety concerns. Cost and schedule estimates presented by Georgia Power may determine the project's fate. Plant Vogtle is one of Georgia's two nuclear power plants.

“We are committed to offering the highest customer value with rates below the national average, and we’re pleased to be able to continue to pass the benefits of the new tax laws on to our customers,” Georgia Power Chairman, President and CEO Paul Bowers said in a news release.

Companies seeing windfalls from the Trump Administration-backed tax cuts have touted bonuses, wage hikes and other economic benefits of the legislation that slashed corporate tax rates and reduced income taxes for most Americans.

The proposed rebates to Georgia Power customers come from several buckets

About $330 million is expected to come from direct credits to ratepayers because of lower federal tax rates the company will pay over the next two years. Another $130 million in savings to customers will come from reduced taxes related to costs to finance two new nuclear reactors at Plant Vogtle in east Georgia.

Customers have financed construction of the units in Waynesboro, near Augusta, since 2009. The pair of reactors are billions of dollars over budget and years behind schedule.

The state Public Service Commission in recent months approved a new path to continue construction of the reactors, and that plan also included some rebates to consumers, though the plan to move forward has been challenged in court by consumer groups.

About $44 million will be refunded to customers because Georgia Power earned more in 2016 than its allowed range of profits for that year. The utility said the rebate for profits over the allowable range will result in about a $9.50 credit to customers in March.

The company projects about $700 million in future savings could flow to customers as part of the company’s next rate negotiations, which are scheduled for 2019. That figure would need to be approved by the state Public Service Commission.

In April, the typical customer will see a reduction in their monthly bill of about $2.70 related to the tax law and Vogtle financing costs.

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