Nuclear Finance Bill Breezes through House Committee
by
Maggie Lee
Georgia Online News Service
A controversial bill that will result in rate hikes for most Georgia Power customers passed its last committee hurdle today and may appear for a House vote as early as Wednesday.
Rep. Ben Harbin (R-Evans) shepherded Senate Bill 31 through a successful voice vote at the Energy, Utilities and Telecommunications House Committee today.
"It saves money. That's the bottom line," Harbin said in defense of the Georgia Nuclear Energy Finance Act.
The Act would allow Georgia Power to start charging "ratepayers" – mostly households and small businesses – a surcharge to pay financing charges on construction of two new nuclear reactors planned near Augusta. Collection would start in 2011, but there would be no electricity until 2016 at the earliest. Usually Georgia Power can only recoup plant construction costs when plants come online, according to precedents governed by its regulator for ratepayers, the Public Service Commission.
The hike is calculated to start at $1.30 per month on an average family in 2011, growing to $9.30 by 2017.
The incremental increase beats a big hike when the plants come online, Harbin said.
"That would hammer them [ratepayers] pretty hard with over a 12 percent increase in 2016 to 2017. It would be immediate, it would be dramatic, and it would be a shock in many places where they can't afford it," he contended.
But the surcharge could get bigger if construction goes over budget, Harbin admitted.
Rep. Hardie Davis (D-Gracewood) quizzed Harbin on what would protect ratepayers from an out of control construction bill. He wasn't reassured by Harbin's answer:
"The costs will be controlled by the PSC. They have the oversight of the construction," said Harbin.
"What if I suggested I'm not comfortable with that?" Davis asked.
"What can we do to make sure we're doing what we can to satisfy the need not only where Georgia Power is concerned but where the ratepayer is concerned?" he continued, though he did add that he thinks overall SB 31 "is a good bill."
Harbin told him the legislature can exercise oversight over the PSC.
Today was Harbin's first day steering the bill, taking over duty from Sen. Don Balfour (R-Snellville) and Harbin turned to a lobbyist at his elbow for many answers.
Rep. David Lucas (D-Macon), former chairman of the Committee and one of the nay votes, said the General Assembly isn't equipped to decide this complicated finance question because "they don't know a thing about a megawatt or a kilowatt."
"The PSC can do this right now. They're putting this in legislative hands?" he asked rhetorically.
"How many legislators in here know a thing about it? I thought the PSC has a staff to go through all that and determine whether they will allow it to be in their rate of return," he said, exasperated.
Not everyone agrees that the bill is even a money-saver.
Before the final vote, Rep. Don Wix (D-Mableton) proposed an amendment that would have dramatically cut what Georgia Power could precollect from customers. Under the amendment, ratepayers would only pay the interest on Georgia Power's construction loans. They would not pay the dividends for Georgia Power's "equity" financing – the profits to investors who choose to buy equity such as Georgia Power stocks.
"It is my understanding that two-thirds or $1.6 billion of what will be collected is due to equity. … Of that equity there's $400 million in taxes that will have to be paid," Wix said in defense of his amendment.
"We're talking about saving the state of Georgia [ratepayers] $300 million, but yet we're dealing with a lot of money to save $300 million," he concluded.
In the past, Georgia Power has financed construction with about half equity and half debt.
Harbin objected to Wix' amendment, claiming it would drive Georgia Power to seek more debt than equity and drive up ratepayers' overall bills.
Rep. Doug Holt (R-Social Circle) said he voted against Wix' amendment because it is a compromise.
"If we ignore the cost of capital by accepting this amendment, that cost of capital still piles up during each year of construction and thus we're adding up interest on interest to pay later. So by accepting this amendment, we're diminishing the value of this whole structure," Holt said.
Wix' amendment attracted only two votes besides his own: Rep. Randal Mangham (D-Decatur) and Rep. David Lucas (D-Macon). Rep. Earnest "Coach" Williams (D-Avondale Estates) abstained.
Today's hearing lasted only two hours mostly because it was closed to public comment. The Regulatory and Utility Affairs Subcommittee, which OK'd the bill on Friday, heard nearly four hours of testimony, but many Representatives did not attend the hearings of the much smaller subcommittee due to other commitments.
The Senate passed the bill two weeks ago.
Maggie Lee specializes in quality of life topics, Atlanta's international communities and general reporting. She covers Georgia economic development and the Chinese community as a stringer for China Daily and chronicles life in Georgia's most diverse county for the DeKalb Champion. [full bio]
| 