This blog was written by Sara Barczak, former Regional Advocacy Director with the Southern Alliance for Clean Energy.

Guest Blog | November 24, 2009 | Energy Policy, Nuclear

Concerned your home or business electric bills will increase needlessly for new nuclear power reactors that may never get built? Or if these reactors get built in Georgia, concerned there’s no telling how high your electric bills could get? Southern Alliance for Clean Energy shares your concerns. That’s why we’re suing Georgia utility regulators and the Georgia governor right now. We believe they acted illegally after state lawmakers passed a law in 2009 requiring Georgia Power customers to prepay for new nuclear reactors (small customers, that is, since large businesses had enough clout to cut a deal under the Georgia Dome, exempting them from prepaying the way everybody else has to).

We brought this lawsuit to keep ratepayers from having to prepay for two nuclear reactors at Plant Vogtle near Waynesboro along the Savannah River that Georgia Power and its other utility partners have proposed to build. We’ve asked the Court to review the constitutionality of the so-called “construction work in progress” (CWIP) bill passed earlier this year, the Georgia Nuclear Energy Financing Act (SB 31), and the legality of the Georgia Public Service Commission’s approval of Georgia Power’s request to certify building two new reactors at the Vogtle site.

Consumer Rip-Off
Many others share our concerns about this consumer rip-off unfolding if the high-risk Vogtle expansion goes forward under the new Georgia law or the Georgia PSC’s ruling:

• Clark Howard, a national consumer advocate spoke out strongly against SB31 and how Georgia Power and big industrial and commercial companies in Georgia struck a deal with lawmakers to force 100% of the cost of building new reactors at Vogtle onto small consumers saying this is “where the actual real effects of corruption are borne by you and me, not indirectly but immediately and directly.”

• The Fulton County Taxpayers Foundation initiated a lawsuit in 2009 against the Georgia PSC and the Georgia governor on similar concerns. An editorial from the Chattanooga Times Free Press agreed that both the Southern Alliance for Clean Energy and the Taxpayers Foundation pleas had merit.

• Georgia Watch’s Angela Speir Phelps (a former Georgia Public Service Commissioner) commented on how sharply biased against consumers the Georgia PSC 4-1 vote was on the proposed Vogtle expansion. Georgia Watch, Georgia AARP and many others tried to stop state lawmakers from voting for Georgia Power’s and their large customers’ sweetheart Vogtle deal against small businesses and residential customers.

• Even the Georgia PSC’s own Public Interest Advocacy staff, which is charged with balancing the interest of the ratepayer and the electric utility, stated in their March 6, 2009 filing “there can be no serious question that CWIP is harmful to ratepayers. It will cost ratepayers more, deprive ratepayers of the use of their money during the construction period, and create intergenerational inequities.” View the PSC analysis of SB31.

Historical Boondoggles
In the 1970s and 80s the utility industry made a huge financial mess when they built nuclear reactors. There were construction delays and huge cost overruns; many projects were canceled after spending billions of dollars. The industry blamed their problems on changing regulations but it was Wall Street that stopped the nuclear boom. Some reactor projects came in with massive overruns compared to others. The two reactors at Vogtle were among the worst as outlined by expert David Schlissel during the Vogtle certification case. The real problem with the first two Vogtle reactors was poor management. The last time Georgia Power said trust us when it wanted to build Vogtle reactors 1 & 2, projected costs skyrocketed from $660 million for four reactors to $8.7 billion for two – a 1200% increase! This ultimately led, at the time, to the worst rate hike Georgians had ever experienced. In today’s challenging economic times Georgians can no longer be expected to foot the bill for Georgia Power Company follies.

Nuclear Socialism
The main thing the utility industry learned from the last generation of nuclear plants was how to pass risk on to their customers. Plant Vogtle is at the head of the line competing for federal nuclear loan guarantees – billions of taxpayer funds are to back these shaky new reactor proposals. What was never learned but should have been was that the full financial risk of these reactors should belong entirely to the utility that builds them.

Georgia Public Service Commissioners want you to believe that they’ll protect you if costs get too far out of whack this time around. But here’s the real deal:

• The proposed two new Vogtle reactors that Georgia Power wants to build have never been built anywhere in the world. The Toshiba-Westinghouse AP1000 is being built for the first time in China and Georgia Power is pushing to make Georgia ratepayers the new nuclear guinea pigs in the U.S., thanks to the Georgia Commissioners green light.

• The AP1000 design is facing obstacles as the Nuclear Regulatory Commission recently announced serious safety concerns with the ability for some components to withstand strong weather events among other scenarios. This could lead to schedule and budget problems.

• Georgia Power and its parent Southern Company have limited management over the new reactor construction because they’ve turned over most of the control to Westinghouse to work for a consortium of companies. (Be aware that the Georgia PSC has no regulatory authority over Westinghouse or this consortium).

• Change orders can come up at any time when Westinghouse and the construction team determine the new Vogtle reactors will cost more than originally agreed upon. Georgia Power testified to the Georgia PSC in November 2009 that only a few months into the project the Company has already received notice of an unspecified number of potential change orders. The PSC has set itself up to have little control over this situation except to pull the plug on the costly project. The more they let Georgia Power sink funds the more ratepayers are on the hook for having to pay for costly problems with the new reactors.

• Even though Georgia families and businesses are footing the bill, Georgia Power likes to keep the public in the dark – especially with what’s going wrong at Vogtle – here’s a sample page of Georgia Power’s testimony filed at the PSC. The word ‘redacted’ is listed over one hundred times in just thirteen pages of testimony. The public can only see the background on the Vogtle problems that Georgia Power is struggling with by signing a confidentiality agreement and pledging to never discuss the matter publicly. The company claims it would be competitively disadvantaged so much that it could hurt ratepayers if it reveals the information publicly.

Southern Alliance for Clean Energy Takes Action
Judge Marvin Arrington is presiding over both the Southern Alliance for Clean Energy and the Fulton County Taxpayer’s Foundation lawsuits. So far in this case, Georgia Power and the Georgia PSC have objected to our claims that the governor and PSC acted illegally. They argue that Georgia Power ratepayers are not yet harmed by decisions made by the PSC and that our lawsuit is premature. We don’t agree that it’s okay to wait for electric bills to skyrocket and are pushing forward to protect Georgians from the big corporate interests now. We’ll argue our case in court, which is now scheduled for December 2, 2009.

Building new reactors at Plant Vogtle should be halted because it’s too costly and risky for Georgians. If this scheme is not stopped, Georgia families and small businesses will be paying for new reactors years before any electricity is produced and regardless of whether the reactors are ever built. Georgia Power, the Georgia Public Service Commissioners and the majority of state lawmakers have ignored these consumer concerns. We hope our efforts can change that. Please help us continue this work to protect Georgia families and small businesses. And stay tuned for more!

UPDATE: At the December 2, hearing in Futon County Superior Court, Judge Arrington recused himself from the case. A new Judge will need to be assigned to the case. Listen to the GPB radio interview here.