This blog was written by SACE's High Risk Energy Intern, Kailie Melchior.Guest Blog | January 31, 2018 | Energy Policy, Nuclear
I’ve been tracking the troubled nuclear power expansion projects in South Carolina and Georgia and have some observations. With SCE&G and Santee Cooper in South Carolina, I thought utilities learned that taking big bonuses while pushing off costs from a deeply troubled new nuclear power expansion project to the ratepayer wasn’t a good idea…or did they?
In neighboring Georgia the Public Service Commission (PSC) on December 21, 2017 ignored their own Staff’s recommendations and that of other intervenors, including the Southern Alliance for Clean Energy by failing to institute clear protections for Georgia Power customers from the uneconomic (by billions of dollars) Plant Vogtle expansion. Instead, the Commission approved essentially everything Georgia Power asked for and doled out just a slight reduction in the overall profit the company could make on the mismanaged project that is more than five years delayed and has doubled in cost to over $27 billion.
In a small, positive step for ratepayers, the Georgia PSC just ordered Georgia Power to refund $43.6 million to customers (part of a separate proceeding, not related to Plant Vogtle) saying that Georgia Power earned more than the approved rate of return on equity. However, some estimate that because of the new federal tax bill, the utility will save tens of millions of dollars. To address the impacts of the new legislation, the PSC ordered Georgia Power to submit a report to them by February 20. We expect this will indicate how much savings the company expects to glean from the federal tax bill. That money should go back, at least in part, to the ratepayers who have continued to finance the mismanaged Vogtle project despite receiving any benefit (the two reactors should have been operating by now). Hopefully, the PSC does a better job to protect the interest of customers and promote fairness rather than allow this newly available money to turn into undeserved bonuses of utility executives.
Furthermore, it looks like Southern Company and Georgia Power are a different side of the same coin. In South Carolina, a slew of good legislation has been proposed and SACE’s Chris Carnevale just spoke at the annual SC Tea Party Conference about needed changes. One idea floated last November would prevent SCANA from offering an executive a severance package worth more than the most generous payout to a single fired construction employee; it has now been introduced by Representative Kirkman Finlay, III, H.4420. Yet, while ratepayers are still unfairly paying for the mistakes at Vogtle, Georgia Power and Southern Executives are making out like bandits. The Board of Directors should be called on to revise how executives are paid so they can stop rewarding bad behavior and forcing the ratepayers to pay for the executive’s mistakes. Thankfully some Georgia lawmakers are paying attention to what is happening in South Carolina given the introduction of Senate Bill 355 by State Senator Chuck Hufstetler, chairman of the Senate’s Finance Committee, which aims to limit costs customers, particularly schools, have to pay for Vogtle’s expansion. The bill has a bipartisan list of co-sponsors.
Right now, Georgia Power ratepayers will be on the hook if this Plant Vogtle expansion project fails and enormous risks still loom. I hope the Georgia PSC uses its power to start protecting the people rather than those that handsomely profit from yet another nuclear boondoggle. And thank you to those Georgia and South Carolina state lawmakers who are trying to right past wrongs.