Vogtle Nuclear Expansion Total Cost is 65 Billion Dollars, former Commissioner Says
Photograph by Glenn Carroll, Nuclear Watch South
(APN) ATLANTA — Plant Vogtle’s proposed nuclear expansion with new units 3 and 4 will cost an estimated 65 billion dollars, former Georgia Public Service (PSC) Commissioner Bobbie Baker says, based on his analysis of information he received when cross-examining the PSC staff witness at the June 23, 2015 PSC hearing.
The hearing was for the 12th Vogtle Construction Monitoring (VCM) Review.
Former Commissioner Baker, a current legal advisor for Southern Alliance for Clean Energy (SACE), first wrote about his analysis of the new information on the blog, Georgia Utility Update.
Baker wrote that the current “total revenue” requirement for the Project is approximately 65 billion dollars.
“I got that information at the last hearing, when I cross-examined one of the PSC’s staff expert witnesses, Philip Hayet, who was providing the financial analysis for the project,” Baker said.
“I ask him based on the current construction cost projection of 7.5 billion for Georgia Power’s share, what would the total revenue requirement be for their share of the project? And he said 30 billion dollars,” Baker told APN.
Hayet cited at the VMC that Georgia Power’s share of the total revenue was 30 billion dollars, but there are other owners to consider.
Georgia Power only owns 45.7 percent of the Vogtle Project, that is, less than half the total project cost. Other owners are Oglethorpe Power, 30 percent; Municipal Electric Authority of Georgia (MEAG), 22.7 percent; and Dalton Utilities 1.6 percent.
“That was the first time we have gotten that kind of information for the total project cost from Mr. Hayet… That number includes construction, financing, operation, and maintenance over the life of the project,” Baker told APN.
The total revenue number will increase as the two million dollar a day delays continue to add up. Unless the PSC or Legislature changes course, Georgia Power’s share of the 65 billion cost will come out of the ratepayers’, not stockholders’, pockets.
When APN asked Georgia Power about these numbers, they give only the projected construction cost of Georgia Powers share.
“As reported in our latest VCM, the current construction and capital cost forecast for the project is $5.045 billion for Georgia Power’s portion of the project… This is the projected construction cost of the facility,” John O’Brien, Senior Communications Specialist, Georgia Power Company, said in an email.
“With an estimated $3 billion in savings for customers compared to natural gas combined cycle generation, the next best option, it is the most economic choice for meeting Georgia’s future energy needs,” the email continued.
But even though Georgia Power continues to cite a three billion dollar savings figure, Baker insists the figure is no longer accurate, per the PSC’s own staff testimony.
“The company has been touting all these smoke and mirror benefits dealing with savings from financing cost, federal production tax credits for which they would or could be eligible for fuel cost saving,” Baker said.
“It started off at six billion dollars in additional benefits to ratepayers, now that amount has gradually been eroded over time because of the delays. The most recent benefit number is 2.7 billion dollars,” Baker told APN.
“Mr. Hayet said based on his calculation, which included both the benefits and the determinates, his number is now 208 million dollars in current benefits,” Baker told APN.
Baker explained that the federal production tax credits are 522 million dollars, but that in order for Georgia Power to quality for the tax credit, both Vogtle units 3 and 4 are to be operational by December 31, 2020.
Baker says it is highly unlikely Unit 4 will be up and running by then, thus the 522 million dollars has to be subtracted from the current estimate of 208 million dollars in benefits, resulting in a negative benefit for ratepayers.
Also, the email from Georgia Power cites a sixty year expected life of Vogtle 3 and 4 in evaluating the value of the project.
“When considering the Vogtle expansion, it is important to consider the 60 years of benefits and savings they offer for customers, including long-term fuel savings of nuclear generation – this is how we evaluate the value of the project. The economics of completing the new units remain overwhelmingly positive,” O’Brien stated in the email.
As previously reported in APN, “The oldest currently operating nuclear reactor in the U.S., has only operated 45 years. Other reactors have shut down because to operate beyond 40 years is not financially viable,” Glenn Carroll testified at the VCM review.
Georgia Power did not give a rebuttal to Carroll’s testimony.
MORE DELAYS, MORE ADVANCE COSTS TO RATEPAYERS
Hayet testified that the 39 month delay in construction would add 319 dollars or $6.26 per month to the average (1,000 kilowatts hours per month) residential ratepayer bill. The increase will be greater for business owners and customers who use more electricity.
This increase will start in April 2016 and continue until 2020 in the form of higher fuel costs and the Nuclear Construction Cost Recover (NCCR) tax on ratepayers’ monthly utility bills.
Over one billion dollars has already been collected from ratepayers via the NCCR tax.
As previously reported by APN, it was State Sen. Don Balfour (R-Snellville) who sponsored the anti-consumer bill SB 31, which, as enacted, forces ratepayers to pay upfront for the construction of the Vogtle project.