Georgia Power’s Nuclear Fiasco: ‘The Stipulated Settlement Should be Rejected’

[Ed. Note: The author, an energy-management consultant and a classical liberal, is an active voice for free-market energy policy in the Southeastern US. He is also a board director of the Institute for Energy Research (IER) and its advocacy arm, the American Energy Alliance.

The December 2016 filing below was followed by an agreement between the Georgia Public Service Commission and Georgia Power Company that allowed GPC recovery of $1.55 billion in cost overruns regarding the 2,240 MW two-unit Vogtle nuclear project. (The plant’s original cost estimate of $14 billion is currently at $18 billion, a 28 percent overage.)

Mr. Clarkson has critically written on the Vogtle project since 2012, Politics and the Nation’s Next Nuclear Plant (Georgia Power’s boondoggle under construction). Subsequent posts by Clarkson have been written in 2013; 2014; 2015 (here, here, here, and here); and 2016 (here and here).

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” The Georgia Public Service Commission is Imprudent … “

Before the Georgia Public Service Commission (In the matter of: Docket No. 29849)

Construction Monitoring Proceeding for Georgia Power Company’s Plant Vogtle Units 3 and 4; Supplemental Information, Staff Review, and Opportunity for Settlement

The Commission has before it a settlement agreement between the Public Service Commission Staff and Georgia Power Company declaring the expenditures on the Vogtle nuclear project are prudent through December 2015. This settlement agreement should be rejected in whole and each part.

 The Georgia Public Service Commission is Imprudent

It was imprudent for the Commission to even consider approving the construction of another nuclear project given the history of the first phase of Plant Vogtle with its cost overruns and schedule delays.

It was imprudent for the Commission to rely on Georgia Power’s assertions that the agreement between the Company and the Contractor protected ratepayers.

It was imprudent for the Commission not to place a cap on construction costs when approving the project.

It was imprudent for the Commission to reject Staff’s proposal for penalties if the project cost exceed the certified amount.

It was imprudent the Commission to allow pre-collection of interest and profits on capital expenditures.

It was imprudent for the Commission to fail to vigorously oppose the legislation allowing pre-collection and cost recovery if the project halted.

It was imprudent for the Commission to agree to six-month reviews of construction costs. Such a process weakened any future challenge of expenditures and made the Commission a partner in the project.

It was imprudent for the Commission not to join in the lawsuit opposing sales tax collections on financing cost of the project.

It was imprudent for the Commission to even order this extra proceeding to consider prudence.

NOW THEREFORE, it is time for the Commission to do the prudent thing and not approve the settlement before it.

Submitted this 12^th day of December 2016

Jim Clarkson, Resource Supply Management