Governor Perdue: Deliver us from the land of nuclear make believe|
Georgia Online News Service
Georgia Power, the state's largest utility, has been living in a regulatory fantasyland for so long that it has grown accustomed to all its wildest dreams coming true --facts be damned. Now, after the state Senate has ignored mounting public outrage over a bill that would force the utility's residential customers into paying upfront financing costs for two nuclear reactors, there's scant hope that the company's legislative pixies will return to reality anytime soon.
Despite major flaws, the Georgia Nuclear Energy Financing Act of 2009, aka, SB 31, passed the Senate Wednesday, 38-16. By approving the measure, Senate members helped confirm the nagging perception that many of them have been magically transformed into feckless flunkies devoted to deep-pocketed corporate interests instead of looking out for the workaday constituents who elected them. And, make no mistake, every jot and tittle of SB 31 was crafted by Georgia Power lawyers and handed down like holy writ to compliant lawmakers who either failed to fully grasp its consequences or, perhaps, just didn't care.
The measure authorizes Georgia Power to begin collecting $1.6 billion in surcharges for construction of its $14.4 billion nuclear units several years in advance, long before they're expected to start generating any electricity. In addition, customers would also be on the hook for another $400 million in pass-through taxes between 2011 and 2017. This unusual arrangement, Georgia Power claims, is intended to save $300 million in financing costs for the proposed reactors in Blake County near Augusta. Normally, such financing costs are passed along to customers only after power plant facilities are up and running.
Once the bill was introduced by Sen. Don Balfour (R-Snellville), chairman of the powerful Rules Committee, it was all but guaranteed a charmed ride to easy passage. Although there was a timely outcry by a welter of prominent good government types and local newspapers around the state who opposed the bill, the fix was already in. The bill stands a better-than-even chance of being approved by the House.
It's of little comfort that there were slight, but salutary changes made to the measure prior to the Senate vote. For instance, the Georgia Public Service Commission still has a modicum of flexibility in lessening the burden of the pre-payment surcharges on seniors and low-income customers who are least able to afford it. The bill had already exempted large industrial and commercial ratepayers from the advance surcharges, a blatant sop to the Big Business lobby in Georgia that would never agreed with this controversial financing scheme if its clients were also being required to foot the tab.
No matter how you slice it, however, this bill was way too broken to be fixed. If passed into law, it will disproportionately place the burden for the plant's financing costs on residential customers when Georgia Power and its shareholders should be shouldering the risks.
The bill's inherent inequities were dissected by the PSC staff and expert witnesses who presented testimony in the case that's also pending before the commission. Sparing the wonky details, the PSC analysis criticizes key aspects of the bill and many of its underlying assumptions. For one, Georgia Power appears to be operating under the delusion that residential customers have nothing better to do with their hard-earned money than forking it over the utility, which is a privately held company. What's worse, sloughing those costs onto customers creates a disincentive for Georgia Power to complete the plants on time or on budget.
Another still-unanswered question is why the Legislature is getting involved in regulatory matters concerning Georgia Power at all, a function that should rest with the five-member PSC. Granted, commissioners have rarely been aggressive in holding Georgia Power accountable for its actions in the past. But SB 31 further emasculates the commission by taking critical financing decisions out of its hands and enshrining them in state law. If lawmakers allow that to happen, it will be extremely difficult to change course in the future if all doesn't go according to plan. And, if history is any guide, there's a strong possibility that the nuclear expansion at Plant Vogtle will go seriously awry.
Consider this: Back in the 1970s, when the first pair of reactors were being built at Vogtle, Georgia Power estimated that construction costs at $680 million. But when it was all said and done, the bill was (drumroll please) ...$8.4 billion, more than 12 times the original cost.
More recently, lawmakers in Florida are now trying to undo a similar pay-it-forward financing scheme, which they had approved several years ago for nuclear power expansion after electricity bills for customers of Progress Energy skyrocketed 25 percent. By the same token, if Georgia Power's estimates for its new reactors come in higher than expected, residential customers could also face such whopping increases.
Those aren't fantasies; they're facts. In spite of the state Senate's misguided vote, we'll all be better off if House lawmakers and Gov. Perdue block this bill and deliver us from once and for all from Georgia Power's world of nuclear make-believe.
Lyle Harris is a former member of the Atlanta Journal-Constitution editorial board. [full bio]
Editor's note: Hello, Georgia! Before I get into two news stories for today, I want to call your attention to articles we're moving on the Georgia Online News Service (GONSO) that are crafted for weekend editions – and, of course, this weekend is Valentine's Day. In commemoration of the day of hearts, we'll send you a sweetheart of a column on Friday by Jeanne Bonner. On subjects other than the Cupid beat, one of Georgia's most respected food and restaurant writers, Susan Puckett, has a good weekender (or, good any day) article among today's line up on how eateries across the state are struggling to survive during the economic downturn. And, if you want a weightier piece to digest over the weekend, I'll author an analysis tomorrow on how "economic development" measures in the General Assembly are bad business for citizens. Also moving tomorrow will be a story with two versions – one geared to the entire state, the other targeted to Atlanta – by Jeanne Bonner on the innovative ideas condo developers are coming up with to sell units. Finally, veteran Atlanta journalist Maynard Eaton will have an article tomorrow on what's happening with the Legislature's black caucus.
Today, we have two thought-provoking pieces on the Legislature. Lyle Harris gives us some important background on Georgia Power's scheme to "pay it forward" financing for future nuclear plants. And, Maggie Lee writes about how state officials are already planning how to carve up the anticipated stimulus dollars that will flow from Washington.
As always, we'd like to hear from you. GONSO is an enterprise founded and staffed by more than two dozen leading journalists and media executives in Georgia. We're providing content free -- for a limited period. Newspapers, broadcasters, bloggers and websites are welcome to use our articles -- please credit the writers and the Georgia Online News Service.
Send your comments and any story ideas to executive editor John Sugg at firstname.lastname@example.org. You can also call us at 800-891-3459.