The last new nuclear power project remaining in the U.S., the expansion of Plant Vogtle in Georgia, is in turmoil. In August, Southern Company announced that the already budget-busting project had a $2.3 billion cost increase, just eight months after another multi-billion dollar cost increase was approved by the Georgia Public Service Commission (PSC) over the objections of PSC Staff and many intervening parties (including SACE, a former U.S. Nuclear Regulatory Commissioner and Public Service Commissioner who predicted nearly all that occurred). What was once a ~$14 billion project that should have been fully operational in 2017 has now doubled in projected costs, and nine years into construction, the project is only halfway complete – meaning that it may be operational by the end of 2022.
Because of this recent massive cost increase, an imminent “go/no-go” decision needs to be made by September 24, 2018 by the Vogtle Co-Owners, which include Southern Company’s largest subsidiary, Georgia Power (45.7%), Oglethorpe Power (30%), the Municipal Electric Authority of Georgia (MEAG) (22.7%), and Dalton Utilities (1.6%). MEAG has a Board meeting today – it’s unclear if they’ll decide at that meeting or wait until next Monday.
But a Series of Unfortunate Events is making all of this a very difficult, complicated decision:
- Jacksonville Electric Authority (JEA), has serious Buyer’s Remorse and wants out BIG time and are pulling out all the legal and political stops to get out of the bad contract they entered into back in 2008 to buy power from MEAG from Vogtle’s first 20 years of operation. Here’s a sampling of JEA’s activities:
- Filed a complaint over their agreement with MEAG (and then MEAG countered with a lawsuit)
- Filed a petition with the U.S. Federal Regulatory Commission (FERC) wanting the federal agency to engage
- Filed a letter with MEAG offering both JEA and MEAG an affordable way out that JEA claims could save $2.5 billion and protect all parties’ customers from the continually-skyrocketing Vogtle costs
- Started a public relations campaign urging Georgians to speak out against continuing Vogtle, including a full page ad in the Marietta Daily Journal – see Page A7 – and a billboard in Georgia, pictured right)
- A powerful group of members of the Georgia’s General Assembly, predominantly Republicans, from districts within MEAG’s service territory sent a strong letter to the Vogtle Co-Owners asking for a cost cap on the project before deciding to move forward with the project.
While all of this is happening, the Department of Energy (DOE) is potentially finalizing an additional $3.7 billion in taxpayer-backed federal nuclear loan guarantees to further bail out the troubled Vogtle project. This is on top of $8.3 billion in loan guarantees that the Vogtle partners already secured without having to put much “skin” in the game. The deadline for the latest extension is September 30, 2018. Recently the Southern Alliance for Clean Energy along with progressive and conservative partners called upon the DOE to withdraw finalizing the loans and asked U.S. House and Senate Budget Committee members to investigate the loan guarantee and the risks to taxpayers.
Additionally, the five member, statewide-elected Georgia PSC Commissioners have the 19th semi-annual Vogtle Construction Monitoring (VCM) report to contemplate with upcoming hearings in November and December to consider whether to approve $578 million in expenditures, the largest request to date, during the reporting period covering January 1 through June 30, 2018. It’s notable that Georgia Power is not, yet, requesting an adjustment to their portion of the project’s cost given the August announcement of the $2.3 billion increase.
But as the letter from the Georgia Assembly members mentioned above stated: “As part of this announcement, Southern Company pledged that its shareholders would absorb Georgia Power’s share of the increase. This puts a disproportionate cost burden on EMC and city utility customers – our local utilities don’t have the luxury of shareholders to absorb these additional costs and will have to increase rates even higher. This approach is unfair and anti-competitive.”
Now among the many questions we might ask are: how will the Vogtle Co-Owners vote? What will the Department of Energy do? What will the Georgia PSC decide? Will their decisions continue to be unfair and anti-competitive – resulting in yet another installment in the Series of Unfortunate Events that is Plant Vogtle’s expansion? Stay tuned.