Don’t read beyond this sentence if you don’t pay a power bill in Georgia and never will.
Otherwise, get your wallet out.
There’s a bit of show biz about to start Monday in hearings with elected state regulators. When it’s over, it’s likely to end up costing you and your Georgia descendents for decades to come.
That’s because the only giant, deeply delayed, steeply over-budget nuclear power construction project still underway in the U.S. may well get another wink and pat on the back from Georgia regulators.
So far, Georgia politicians have failed to enact significant consumer protections that would limit a government-enforced monopoly (Georgia Power) from sidestepping the vast majority of risk while raking in extra (extra!) profits on the overruns for the company’s Plant Vogtle expansion.
Elected members of the Georgia Public Service Commission start the first of four days of hearings Monday. It’s Round One in what on paper could be a momentous decision after years of complex construction plagued by unfinished designs, incomplete scheduling, flawed parts and workmanship, insufficient oversight early on and too much worker downtime.
The PSC accepted the setbacks, missteps and busted budget in the past. But now PSC members are faced with their first go/no-go vote since originally approving the project in 2009. That’s because the bankruptcy of Westinghouse, the project’s main contractor, throws significantly more risk and cost into the mix.
Pitch from CEOs
Georgia Power CEO Paul Bowers, whose company may make billions of dollars in extra profit if the project survives, has been asked to speak at the hearing along with leaders of the plant’s other owners who are affiliated with city utilities and electric membership corporations.
They will try to convince officials that pushing forward is a reasonable and wise step. And that Georgia Power and its shareholders shouldn’t be stuck with any of the growing costs.
The PSC is slated to make a decision in early February.
Officially, the commissioners haven’t decided anything.
Yet some PSC members have publicly stated that they’d prefer if the project could push forward. So much for PSC rules which mandate that they “hold no presumption in favor of the position of any party” and that “in all cases” they reserve opinion on PSC matters until all evidence is submitted and considered in sessions.
‘Unabashed’ supporter with a ‘hammer’
PSC chairman Stan Wise, who has been particularly accommodating to Georgia Power over the years, recently wrote that “as an unabashed supporter of nuclear power” he’ll be present for the Vogtle vote.
Then he plans to resign his seat mid-term, he wrote in a letter to our Vogtle-loving governor, who will select who fills the post and gets the important title of “incumbent” before next year’s elections. According to the Marietta Daily Journal, Wise said rather than retiring he wants to use his relationships with those in the utility industries to continue to help people.
They could use help.
In 2011, Wise and other PSC commissioners left consumers deeply exposed when they ignored the advice of staff and failed to mandate that Georgia Power share in the financial risk on Vogtle, a project the company proposed.
At the time, Wise said he and his colleagues still would have the power to review the Georgia Power project’s costs for “reasonableness and prudency.”
“That’s the hammer and the most important tool this Commission has,” he said in a press release at the time. “We get to look at these expenses all the way to 2016 and 2017.”
The hammer turned out to be more like a tickly feather.
Late last year, the PSC green-lighted a big chunk of Georgia Power’s blown costs and then gave it more wiggle room to further increase costs. In truth, the PSC did set triggers for short-term curbs on company profits, which nonetheless will still soar over the long term specifically because the project is overbudget.
How’s that for effective government regulation of a monopoly?
Trouble across the border
South Carolina offers a roadmap to how ugly this nuclear bumbling could get.
Earlier this year, two South Carolina utilities dumped out of another nuclear project that — according to Georgia Power’s submitted testimony — was virtually identical to the one at Vogtle and shared the same contractors and learnings.
The decision by SCANA Corp. and Santee Cooper has sparked a political storm in the Palmetto State, touching off lawsuits and investigations and leading to the departures of CEOs at both utilities.
It also unleashed a flood of aggressive news reporting, particularly by The Post and Courier in Charleston and The State in Columbia.
Now, Georgia PSC staffers are asking Georgia Power for records that might show whether it faces more issues that have recently surfaced in South Carolina. That includes questions about whether some critical project blueprints were never stamped by professional engineers and whether a contractor’s audit showed that utility officials knew more about serious troubles than was made public to regulators and shareholders at the time.
Liz Coyle, who leads consumer group Georgia Watch, suggests the revelations in South Carolina raise basic questions about what Georgia Power and its parent, Southern Company, knew.
“Were they forthcoming with the Georgia Public Service Commission?” she asked.
Absolutely, the companies say.
“Gosh, all along the way we’ve been exceedingly transparent with the commission,” Southern CEO Tom Fanning told analysts recently. “Everything has been on the table.”
PSC Commissioner Lauren “Bubba” McDonald, who actually has pushed back against Georgia Power at times in recent years, told me he wants to see the project finished “if reasonable.”
“I don’t like to fail,” he said.
But he also said, “I’m not going to spend foolishly. I’m not just going to roll over.”
We’ll see how that plays out.