This article summarizes a 32-page informative report by Georgia Conservation Voters (GCV) and Environment Georgia that explains the true cost of Plant Vogtle. The report is designed to promote public understanding and hold those accountable for robbing utility customers. Here is a link to the full report:
The report holds the Georgia Legislature, the Georgia Public Service Commission (PSC), and Georgia Power/Southern Nuclear accountable for decision-making that reflects malfeasance, corporate greed, and commission incompetence and has imposed scandalous and continuous rate increases on Georgia customers.
The Public Service Commission’s role is in part to protect consumers from monopoly power, they have been woefully remiss in their duties to the people of Georgie. Time and again they decided to continue with the most expensive power plant ever built on Earth to the detriment of ratepayers and the environment. This report focuses on the true cost of Vogtle Units 3 and 4.
More affordable energy choices could have been made in 2009 when this project was first approved; the contrast was even more true in 2017 when a critical, mid-project decision point arose and approval was granted to continue the project. The full Georgia Conservation Voters (GCV) report goes into the weeds on how and why so many bad decisions were made.
WHAT IS PLANT VOGTLE
Plant Vogtle is a nuclear power plant located in Burke County approximately 175 miles southeast of Atlanta. Construction started on the first two nuclear units in 1976 and was completed in 1987 and 1989.
Vogtle Units 1 and 2 were originally budgeted at $660 million but cost $8.9 billion and took 13 years to build.
Vogtle 1 and 2 had a horrible construction track record with skyrocketing cost overrun; however, in 2009 two additional units were planned with construction to begin in 2013.
Ignoring all the warnings the Georgia Public Service Commission (PSC) signed off on building Vogtle Units 3 and 4. Georgia Power promised to deliver Vogtle 3 and 4 on budget and on time. These units were expected to take about four years to complete after construction started with an estimated cost of $14 billion.
Vogtle 3 and 4 are being built on the grounds of the existing Vogtle nuclear power plant in Burke County, Georgia, alongside Units 1 and 2.
Construction of Vogtle Unit 3 began in 2013 and Unit 4 began in 2014 during the so-called “nuclear renaissance.” The units were initially projected to come online in April 2016 (Unit 3) and April 2017 (Unit 4). These projected in-service dates have proven to be completely unreliable.
The date for completion of Vogtle 3 changed to November 2021 but that date was missed. The company gave numerous reasons why these units would not be finished in 2021 which you can read in the link above to the full GCV report.
The projections for Unit 3 in-service date changed to 2022 and 2023 for Unit 4. The latest projection is February 2024 but it is difficult to take company estimates seriously because they keep changing.
Plant Vogtle’s cost and schedule estimates from the company made through state filing are equally misleading and unreliable. At the end of 2021, the construction on Units 3 and 4 has yet to be completed and costs have skyrocketed to an unbelievable $32 billion, with billions more to come as construction continues.
Worst of all, these expenses are not borne by the utilities that own and are responsible for Plant Vogtle, they are costs that have been passed down to unsuspecting consumers in Georgia.
GEORGIA PUBLIC SERVICE COMMISSIONERS IGNORE WARNING
The Georgia Public Service Commission (PSC) is a state agency run by five Republican commissioners. None are Georgia Power customers – they live in parts of Georgia served by Electric Membership Corporations. But they make decisions for 2.5 million Georgia Power Customers.
The PSC claims to “safeguard your interests” but that is not the case when examining the commission’s behavior with Plant Vogtle. Given the legendary cost overruns associated with the building of the original Vogtle 1 and 2, the moral of the story of Vogtle 3 and 4 might be “fool me once, shame on you; fool me twice, shame on me.” But that did not stop the commissioners from signing off on Vogtle 3 and 4 nor did testimony from expert witnesses slow down the rush to build Units 3 and 4.
Expert witnesses for the Georgia PSC staff underscored the risks at the very outset.
Dr. William Jacobs, Ph.D., testified that the project holds a significant risk of schedule delays and cost increases. He had concerns that the AP 1000’s modular construction had never been used on a nuclear power plant and the licensing process was untested. Major components will be manufactured overseas and transported to Vogtle. He thought it improbable that the construction would be completed with no additional cost.
PSC Interest Advocacy Staff expert witness, Tom Newsome, voiced similar concerns. It would be the first new nuclear plant in the U.S. in 25 years with a new safety system design fabricated with techniques that have not been used in nuclear construction in the nation. Newsome thought the Commissioners would proceed cautiously because of construction delays and cost overruns with Vogtle 1 and 2 and the Plant Hatch project.
The voice of hubris drowned out the voices of caution and Georgia state officials authorized the construction of two more nuclear reactors at Plant Vogtle,
THE FINANCIAL RISK OF VOGTLE WAS SHIFTED TO RATEPAYERS
Georgians have the impression that the cost overruns and construction delay only matter to Georgia Power customers. This is incorrect. Here are the facts: the Vogtle expansion project also involves 34 of Georgia’s 41 electric membership cooperatives and 42 of Georgia’s 53 municipal electric utilities. In all, these 77 utilities account for more than 93% of all electricity sold to retail customers in the state.
It is common knowledge in the regulatory community that the Georgia PSC holds the financial needs of Georgia Power in much higher regard than it does the protection of ordinary Georgia residential ratepayers. So the financial risk of this high-risk project was shifted to the ratepayers.
The Georgia State Legislature passed SB 31 a controversial, anti-consumer bill to put Construction Work in Progress (CWIP) into rate base. This means that Georgia Power customers pay in advance for the financing costs associated with the Vogtle Units 3 and 4 before their delivery of any electricity.
As of December 2020, Nuclear Construction Cost Recovery (NCCR) on your utility bill provided cash collections from industrials was only $400 million or 11%; commercial customers paid $1.39 billion or 40%; and residential customers paid $1.66 billion, a whopping 47%.
This legislation handed Georgia Power billions of dollars in profits.
On March 21, 2018, the Georgia Legislature passed SB 355, which will sunset the notorious anti-ratepayer Georgia Nuclear Energy Financing Act of 2009 for any future nuclear plants.
THE NUCLEAR BOONDOGGLE BEGINS
In the United States, only two nuclear projects moved forward with construction—Vogtle 3 & 4 and VC Summer – both in the Southeast, where regulator deference to utility decision-making over consumer protections is strong.
In July 2017, South Carolina’s VC Summer project was canceled. That cancellation cost billions of dollars but ultimately saved the people of South Carolina many more billions, possibly $20 billion.
After nearly a decade of project mismanagement on Vogtle 3 and 4 from 2009 to 2017, the Commission should have known and taken real action to protect the ratepayers of Georgia.
Despite the VC Summers’ failure and significant amounts of expert testimony calling into question the cost-effectiveness of the project and the ability of the Company to complete the project even with a new, higher budget and extended schedule, the Georgia PSC voted to move forward.
In Dec. 2017, the Commission approved a revised schedule that pushed the Vogtle date of operation from mid-2016 to the end of 2022 with a newly approved budget of 170% of the original budget. During this time, Southern Company stock doubled in value.
The continuation of this expensive and risky project on the backs of Georgians as they struggle to pay their electric bills is shameful.
In 2019, the Georgia PSC settled a rate increase proceeding in very favorable terms for Georgia Power. The desire to prop up Southern Company’s stock price and provide cover for Vogtle project failures motivates the Georgia PSC to grant Georgia Power an exceptionally high Return on Equity (ROE) of 10.5%, the PSC provides other financial maneuvers to hide Vogtle’s failure.
All the documentation that costs far outweigh the benefit and continuation was detrimental to the people of Georgia, could not persuade the five elected Republican Commissioners – Stan Wise, Tim Echols, Chuck Eaton, Doug Everett, and Lauren McDonald – to cancel the project or place the financial burden on Georgia Power. Tim Echols was the most rabid pro-nuclear commissioner.
THE COST OF PLANT VOGTLE’S NUCLEAR UNITS 3 AND 4
The cost of Vogtle Units 3 and 4 is now at $32.3 billion. This is only a partial accounting because supporters of this project attempt to hide some of these costs by eliminating items paid by “somebody else,” such as the bankruptcy of Westinghouse or costs that Georgia Power does not intend to recover from ratepayers.
It does not include the benefits of $12 billion in taxpayer-backed federal loans.
or additional costs resulting from a June 2021 U.S. Nuclear Regulatory Commission investigation underway to identify what led to remediation work and safety failures for Unit 3 at Plant Vogtle. And it does not include the fact that these units are not yet in service and construction continues and that costs will far exceed the $32.3 billion.
At $32.3 billion, Plant Vogtle is the most expensive electricity in the history of the world, paid for by one state in the poorest region of the country. This project makes it clear that the Georgia Public Service Commission does not protect the public interest or provide regulatory oversight of Georgia’s powerful utility monopoly.
This price tag of over $32.3 billion could have purchased four solar power plants with a week’s worth of energy storage, or conversely, the same amount of electricity these two units will produce, 2200 MWs, could have been purchased for only $8 billion, had any other generation choice been made.
As energy resources such as natural gas, energy efficiency, and renewable energy dropped in costs, resistance to these two nuclear reactors grew stronger.
GEORGIA POWER AND SOUTHERN COMPANY PROFIT FROM DELAYS
Typically a project owner loses money when a project goes over schedule, but Georgia Power and Southern Company are making money as the Vogtle project continues to not meet schedule deadlines.
Since Georgia Power is a monopoly and operates outside of a competitive business market, it can shift risks and costs onto customers if regulators or legislative bodies allow it. It is normally illegal for a company to charge people for something they did not buy and do not have unless the state decides otherwise. Then, it’s fine.
Georgia Power’s profit will increase the longer it takes to complete Vogtle 3 and 4 because they earn massive profits each year as there is no sunset of the Nuclear Construction Cost Recovery (NCCR) that customers pay each month on their utility bill.
Future projects can not charge utility customers in advance for services they have not received and may never receive thanks to SB 355 which sunsets the notorious anti-ratepayer Georgia Nuclear Energy Financing Act of 2009 for any future nuclear plants.
VOGTLE NUCLEAR POWER UNITS 3 and 4 ARE NOT NEEDED
Georgia Power customers don’t need Plant Vogtle 3 and 4 and never did, not in 2009 when the commission approved this project nor in 2017 when the commission recommitted to the project.
In 2009, Georgia Power had a reserve capacity of 31.5% or twice the North American Electric Reliability Corporation’s (NERC) 15% recommendation, and Georgia Power also had a stunning prospective reserve capacity of 53.6% in 2009. Despite these facts, the expansion of Plant Vogtle was approved
Then in 2017 the Georgia Public Service Commission again had the opportunity to cancel the Plant Vogtle expansion project as a result of the bankruptcy of Westinghouse and unreliable and inaccurate Georgia Power estimating project timelines, cost estimates, and load forecasts from 2009 to 2017.
Georgia Power’s assertion that Vogtle 3 & 4 are the most economical means to meet the electricity needs of Georgia Power customers is not supported by recent evidence about the costs of other resources that were qualitatively dismissed by the Company and Georgia Public Service Commissioners.
NUCLEAR POWER SHOULD BE BANNED
Mr. Gregory Jaczko served on the U.S. Nuclear Regulatory Commission from 2005 to 2012 and was its chairman from 2009 to 2012 but now believes nuclear power should be banned.
Georgians will be paying the price of the nuclear energy industry hubris for eight decades. The Savannah River contributes 160 million gallons of water daily to cool the nuclear units and most evaporates and does not return to the river for downstream uses.
Another bad outcome involves a radioactive release from an accident or a defect caused by shortcuts taken by Georgia Power. The results of monitoring of radioactive pollution in the air and water are not made publicly available. Does the Georgia Environmental Protection Division (EPD) not wish the general public to know this information? This is concerning given the known risks of nuclear energy.
WHAT CAN BE DONE
1. The Georgia Public Service Commission should disallow Georgia Power from placing all of these nuclear construction costs onto our bills and share rate increases more fully between customer classes.
2. Voters should hold Commissioners accountable by ejecting them from their seats and electing pro-consumer candidates that commit to transparency.
3. The Georgia State legislature should fully fund an independent Consumer Utility Counsel (CUC).
4. The Georgia State legislature should create an independent study commission to document lessons learned.
Solar energy costs have fallen 82% since 2010 and are expected to continue to decline another 60% in the next decade, and even now solar is less expensive than any other type of energy generation.
Other 21st century innovations include advanced energy efficiency and lighting, demand response programs that pay people for shifting when and how they consume electricity, and beneficial electrification to replace fossil fuels in the home and vehicles.
As most state commissions and utilities engage in this exciting and innovative era and transition away from fossil fuels towards a clean low-cost energy future, Georgians will be saddled with expensive new nuclear energy and high energy bills until the year 2075 or 2080. What has happened here is ratepayer robbery: the expensive 20th-century practice of building large nuclear power plants continues here. The Georgia Public Service Commission’s failure to pursue 21st-century innovation has harmed Georgians and will soon result in the highest energy bills in the United States to pay for the most expensive power plant ever built on Earth.
The current PSC commissioners are Tim Echols, Fitz Johnson, Lauren McDonald, Tricia Pridemore, and Jason Shaw. All five commissioners are Republicans.
photo by Gloria Tatum