MEAG Votes to Continue Overbudget, Much-Delayed Plant Vogtle Nuclear Expansion
FOR IMMEDIATE RELEASE
September 24, 2018
Contact: Jennifer Rennicks, SACE, 865.235.1448
MEAG Votes to Continue Overbudget, Much-Delayed Plant Vogtle Nuclear Expansion
Over opposition of JEA, major purchaser of future Vogtle generation from MEAG, and despite project being uneconomic for customers, MEAG agrees to continue
Atlanta, Ga. (September 24, 2018) ///PRESS RELEASE/// Today, co-owner Municipal Electric Authority of Georgia (MEAG) voted to continue forward with the only remaining nuclear power project in the U.S. – the Plant Vogtle expansion in Burke County, Georgia, even though the project is uneconomic to continue. Nine years into construction, the mismanaged project is only half complete, more than five years delayed, and has doubled from the original $14 billon cost to some estimates approaching $30 billion. Today’s MEAG Board vote was triggered after a $2.3 billion increase in the project was announced in August, just eight months after another multibillion cost increase was approved by the Georgia Public Service Commission (PSC), ignoring their own Staff’s recommendations and that of other intervenors, including the Southern Alliance for Clean Energy (SACE). A decision from Oglethorpe Power, another Vogtle co-owner, on whether to proceed or halt the project is expected sometime today.
“MEAG’s decision to go forward with the Vogtle nuclear units despite serious objections by a key utility partner of theirs, Jacksonville Electric Authority (JEA), and additional massive cost overruns and continued mismanagement represents yet another broken promise for electric power customers in Georgia, who will suffer because of the inability for the owners and their regulators to make hard decisions,” said Sara Barczak, regional advocacy director with Southern Alliance for Clean Energy (SACE). “And in response to some of Georgia Power’s claims, Plant Vogtle putting downward pressure on electricity rates is in the same way that a hurricane provides you an opportunity to get a new roof. There are other, far more affordable clean energy choices available today that could keep the lights on.”
Initial analysis by SACE shows that for what Georgia Power has invested in Plant Vogtle’s expansion ($5.68 billion in capital and financing costs to date), affordable, carbon-free electricity generation from renewable energy choices available today such as solar or wind could provide power to more than 550,000 Georgia households. Based on an estimated $12.4 billion spent thus far on the project by all Vogtle co-owners, solar or wind developments could provide power to more than 1.2 million Georgia households. Additionally, despite nine years of construction and billions spent on the new Vogtle reactors, no new electricity has been produced. Further, solar and local wind projects that are initiated today could be online two years before Vogtle’s current completion date projected to be late 2022, if there are no further delays. Both of the new Vogtle reactors were supposed to be in operating by April 2017.
“It is hard to imagine a much worse result if the Soviet politburo had been in charge of Georgia electricity policy. Rather than admit serious past mistakes, utilities and the state have chosen the most expensive and most governmentally-dependent and subsidized power source,” said Peter Bradford, a former Commissioner with the U.S. Nuclear Regulatory Commission (NRC) and former Chairman of the Maine and New York utility commissions, who testified on behalf of SACE before the Georgia Public Service Commission in the 17thsemi-annual Vogtle Construction Monitoring review that was approved last December. “Their decision will hurt employment among large electricity users and alternative power sources. It will also stifle technological innovation in the Georgia electric sector for many years.”
In his previous testimony, Mr. Bradford highlighted the dismal economics of new reactors compared to other energy alternatives and offered upalternatives to the Vogtle reactors based on the combinations of energy resources that have replaced more than 150 canceled and closed nuclear plants without power shortages. He also mentioned Jacksonville Electric Authority, who threatened last year to cancel its contract to buy power from Vogtle because it was too expensive compared to available alternatives. Since then, JEA has taken extraordinary measures to get out of their agreement with MEAG, including a full-fledged public relations campaign.
“MEAG’s ill-advised decision does not inject certainty into the future of the off-track Vogtle nuclear expansion,” continued Sara Barczak, with SACE. “Many, many risks remain that could further derail the project and cause its demise. It’s just incredibly unfortunate that Georgia’s electric customers will be stuck footing the massive bill for the utilities’ and their regulators’ and their lawmakers’ costly mistakes. We hope that Oglethorpe Power has the courage to do what’s right to protect their customers.”
Inan effort to buoy the project, the Department of Energy (DOE) announced conditional approval last September of an additional $3.7 billion in federal taxpayer-backed nuclear loan guarantees to three of the Vogtle project partners: $1.67 billion to Southern Co.’s Georgia Power, $1.6 billion to Oglethorpe Power Corp., and $415 million to the Municipal Electric Authority of Georgia (MEAG). These proposed loans were on top of the $8.3 billion in loan guarantees that utility project partners previously secured.
In late August, acoalition of taxpayer and consumer watchdog organizations representing conservative and progressive members, including SACE, requested that the U.S. House and Senate Budget Committees investigate the troubled Vogtle nuclear expansion and the risks to U.S. taxpayers before finalizing additional loans. The groups also filed a detailed letter with Energy Secretary Rick Perry highlighting their concerns and the DOE has yet to reply. On Friday, DOE reportedly sent a letter to the project partners, appearing to pressure the utilities to continue forward with the project.
“With a heavy hand, the Department of Energy sent a letter late last week imploring the project partners to move forward with Vogtle because that is necessary to protect DOE’s reputation and fulfill DOE’s commitments. But, DOE’s reputation and commitments are not these utilities’ concern. MEAG’s decision today is alarming. We hope it was made after considering the very real risks to Georgians and not the thinly veiled threats of DOE,” said Mindy Goldstein, Clinical Professor of Law at Emory University School of Law and legal counsel to SACE on various issues related to Plant Vogtle.
Additional Information:
Georgia Power’s 19thsemi-annual Vogtle Construction Monitoring report references an additional $1.1 billion cost increase to $8.3 billion (this includes a $1.493 billion reduction from the Toshiba Parent Guarantee) to complete Georgia Power’s portion of the project as 45.7%, which represents more than a doubling of the original certified capital cost estimate of $4.418 billion. Georgia Power’s estimated financing costs are $3.2 billion, up significantly from the original $1.695 billion estimate. Originally the two reactor units should have both been online in April 2016 and April 2017 and new Company estimates, which the PSC PIA Staff could not verify as they did not receive the resource loaded fully integrated project schedule in time to review, are November 2021 for unit 3 and November 2022 for unit 4.
Over $2.2 billion in pre-collected financing costs have been charged to ratepayers due to anti-consumer state legislation passed in 2009 to incentivize building new reactors. Georgia Power is 45.7% owner in the project and remaining utility partners are Oglethorpe Power (30%), MEAG (22.7%) and the City of Dalton (1.6%). SACE determined the disproportionate burden due to pay-in-advance payments the Vogtle project has had on residential customers in comparison to large industrial users. Residential customers are currently paying over 0.7 cents/kWh, while industrial customers pay less than 0.2 cents/kWh. Over the first six years of these mandatory nuclear plant construction financing fees, residential customers have paid 45% more than average (on a per kWh basis), while industrial customers have enjoyed a 58% below average rate.
Find filings with the Georgia PSC in the semi-annual Vogtle Construction Monitoring review docket here. Find more information about Plant Vogtle here.
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Founded in 1985, the Southern Alliance for Clean Energy promotes responsible energy choices that work to address the impacts of Global Climate Change and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org.