One wonders what it is going to take in order to get the Georgia Public Service Commissioners’ attention when it comes to the two under-construction nuclear reactors at Plant Vogtle? As reported by Georgia Power in their 13th semi-annual Vogtle Construction Monitoring (VCM) report, the project is $1.4 billion over budget and at least 39-months delayed. Many significant construction hurdles and challenges remain and testimony during the last monitoring period hinted at further delays, which would result in even more cost overruns. The Commission has approved all of the Company’s applications for expenditures, which has amounted to $2.96 billion as of the August approval of the 12th VCM request. Georgia Power is asking for verification and approval of $148 in expenditures the current reporting period.
Earlier this week, the Southern Alliance for Clean Energy (SACE) asked the Commission to expand the proceedings in order to help the public learn more about the eroding economics of the project and better understand the impacts on Georgia Power customers. SACE’s attorney, former Commissioner Bobby Baker, implored the Commission at today’s Energy Committee meeting. Our request mentioned:
The dramatic change in circumstances regarding the Vogtle Project’s financial impact on ratepayers justifies and necessitates the Commission to expand its review in the Thirteenth VCM proceeding and all subsequent VCM reviews to consider not only the expenditures for the Project but also whether the Company’s return on equity level should be adjusted based on its performance.
Disappointingly, but not surprisingly, the Commissioners made it clear at the committee meeting they won’t consider the request. The Commission will vote on the 13th VCM procedural and scheduling order at their Administrative Session next Tuesday.
SACE pointed out that in neighboring South Carolina at SCE&G’s V.C. Summer nuclear plant, where two reactors of the same Toshiba-Westinghouse AP1000 design are also under construction, the South Carolina Public Service Commission recently did adjust downward the return on equity level. That project is experiencing the same problems and costs and timetables for completion have all increased; SCE&G customers are now saddled with the 8th nuclear pre-payment fee rate hike, amounting to 15.5% of their monthly electric bill.
SACE mentioned the eroding economics of the project, given the significant delays especially because Vogtle Unit 4 may not be completed in time to qualify for the federal Production Tax Credits (PTCs), valued at $522 million. Even a slight additional delay in construction, could push Unit 4’s commercial operation date beyond the January 1, 2021, deadline.
This is not a new possibility — a similar loss of $234 million in PTCs just occurred for Southern Company’s troubled Kemper coal gasification project in Mississippi because of a missed construction deadline.
We believe that the high probability that Vogtle Unit 4 will not qualify for any PTCs makes it reasonable to evaluate the financial viability without the PTCs and the impact that potential loss has on Georgia customers, rather than burying this information in any long-term delay analyses.
Once again, the Commission has decided to only focus on expenditures for the Vogtle Project and ignore other pressing and significant issues that have developed because of the current 39-month construction delay and cost increases. Begging the question, when will the interests of ratepayers start getting their attention and what will it take to do so? Obviously reasonable and logical requests do not.