PSC Staff Recommends Approval of More Delays, Cost Overruns for Vogtle Construction, Round Fourteen
(APN) ATLANTA — During the June 30, 2016 hearing of the Georgia Public Service Commission (PSC) on the 14th Vogtle Construction Monitoring (VCM) report, on the proposed new Reactors 3 and 4, the public witnessed Georgia Power and the PSC doing the “time warp” yet again.
“There will be further delays for both Vogtle 3 and 4, Steven Roetger and William Jacobs, Georgia PSC Staff Expert Witnesses, testified.
History is repeating itself yet again. Georgians have been hearing this same song since the 1980’s when Vogtle 1 and 2 went almost 1,000 percent over budget with long delays.
The expert witnesses also gave their opinion that it will be “highly challenging” for Georgia Power a/k/a “the Company” to meet the latest Commercial Operation Date (COD) deadline of June 2020 for Vogtle Unit 4.
“While a cost-to-complete analysis indicates it is economic to continue with Vogtle 3 and 4 construction, a total life cycle analysis with a current Vogtle 3 and 4 cost estimate and natural gas price forecasts would indicate Vogtle 3 and 4 is not economic,” Philip Hayet, Public Interest Advocacy Staff, countered, however, in a public document filed with the PSC.
The semi-annual VCM is a six-month piecemeal process that hides the sunk cost (money already spent) and does not show the bigger picture or the real cost involved.
The approximate total revenue The Company expects to recover from customers during the 2011 to 2020 construction period via the Nuclear Construction Cost Recovery (NCCR) tariff–paid on Georgia Power bills each month–is 3.4 billion dollars.
The latest total project cost for Georgia Power is 7.878 billion dollars; and that is only Georgia Power’s 47.5 ownership part, so the total cost is more than double that.
Construction and capital cost 5.440 billion dollars; and financing cost 2,438 billion dollars. This is an increase of 29 percent in the cost estimate since certification.
However, there are other costs that are hidden or not counted, like the NCCR tariff cost of 3.4 billion to ratepayers. The total cost projections are confusing and not transparent unless one is an expert insider.
Robert Baker, a legal adviser with Southern Alliance for Clean Energy (SACE) and former PSC Commissioner, puts the total Vogtle cost at 65 billion dollars and counting.
Advocates for clean energy wonder if Georgia Power learned anything from the Vogtle 1 and 2 experience.
Actually, they did learn something. They learned to send in their army of lobbyists in 2009 to convince the General Assembly to pass HB 31, the Georgia Nuclear Energy Financing Act, to shift the risk and cost of Vogtle 3 and 4 from the Company to the ratepayers.
This type of anti-consumer law is barred in many states.
“Nuclear construction costs were not, and are not, controllable. This is why there have not been any new reactors built in the United States for more than thirty years,” Steve Prenovitz, an economist and long time observer of this process, predicted in 2010 about new construction on Vogtle 3 and 4.
Unfortunately, his prediction has proven to be true.
The monopolistic Southern Company, the parent company of Georgia Power, uses its regulated utility companies to build high-risk plants like Vogtle 3 and 4.
Then they uses their unregulated generating subsidiary, Southern Power, to build low-risk natural gas plants.
The Southern Company strategy is to produce surplus power and sell to other parts of the country, according to Jim Clarkson, Resource Supply Management (RSM), one of the parties of record.
Senior citizens in Georgia who may not live long enough to see one kilowatt of energy from Vogtle 3 or 4 are paying through the NCCR tariff, so the Company can sell the excess power to other states.
“However, electricity sales are not only flat in Georgia but in the rest of the county,” Glenn Carroll, Director of Nuclear Watch South, told APN.
Carroll, also an expert witness, provided documents to show Georgia Power profits jumped by more than twenty percent after the anti-consumer NCCR tariff forced ratepayers to pay up front for the construction of Vogtle 3 and 4.
But it gets worse.
Liz Coyle, Director with Georgia Watch, while cross-examining the PSC staff, learned that if the COD is missed for Unit 4, the company would lose 300 million dollars in federal tax credits.
If that happens, the company will probably request that lost be offset by–guess who?–the ratepayers.
Coyle also got the Staff to admit that the Company’s expectations to deliver on time and on schedule have been unrealistic from the beginning of the project.
Advocates of clean energy wonder why Georgia Power is building more nuclear, when solar and other renewables are cheaper and faster to build, and when this is the direction of many other countries.
“The more a project under regulation costs, the greater the profit for the utility… The South, with its tradition of re-electing politicians long after they have become too rotten to be trusted, is an excellent place to invest large amounts of capital under regulation with virtually guaranteed returns,” Mr. Clarkson wrote in his written testimony.
“It’s not too late to get out of this nuclear ratepayer bottomless money pit,” Carroll said, asking the PSC to decertify Vogtle 3 and 4 to “free citizens from further exploitation.”
Hayet’s total life cycle analysis indicates Vogtle 3 and 4 is not economic; and Baker has said the total lifetime revenue cost of Vogtle is 65 billion.
These numbers neither include the eventual decommissioning cost of the plant after forty or sixty years, nor the disposal of the radioactive waste cost.
However, the PSC likes nuclear; and so, the PSC staff, at this meeting, recommended that the expenditures of 160 million incurred during the 14th VCM (January to June 2016) be verified and approved by the Commission.