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Cost Controversies Still Inflame Critics of Plant Vogtle Expansion As Kilowatts Go Online

Credit: iStock

by Stanley Dunlap, Georgia Recorder

Georgia Power customers have been vocal about their displeasure over ratepayers bearing the hefty tab for the nuclear power expansion at Plant Vogtle. 

Opponents of the Plant Vogtle expansion, including residential customers and organizations like the Sierra Club of Georgia, argue that household and commercial customers are shouldering a larger portion of the project’s expenses compared to industrial ratepayers and investments in solar and battery storage would have been a better option for the state’s largest electricity supplier.

Georgia Power ratepayer Sue Stoudemire said the controversial nuclear power expansion has faced more than enough setbacks over the last seven years that have led to projected costs doubling to north of $35 billion. On the other hand, Vogtle’s two nuclear reactor expansion is on track to provide power to several hundred thousand Georgians, as well as thousands of Floridians and Alabamans by early 2024, according to Georgia Power officials.

Last week, Georgia Power marked the milestone of unit three reactor reaching its maximum energy output for the first time. Company officials predict that unit 3 will be fully operational in June and that the final reactor of the four at the Burke County plant will be running within the first several months of next year.

Meanwhile state regulators continue to hear from Atlanta residents like Stoudamire and other detractors who say they are worried about the long-term benefits of the investment into nuclear expansion. 

“Southern Company and Georgia are calling Plant Vogtle’s (units) 3 and 4 a triumph and the company plans to celebrate the plant’s birthday soon when they are expected to finally come online,” she said on Thursday during the Public Service Commission’s hearing on the 28th monitoring report on Plant Vogtle.  

“The company’s celebration will ignore the millions of dollars it has taken from Georgians to help finance its for-profit, private business and to pay for its many costly construction mistakes, delays and do-overs at a cost of billions over their proposed budget seven years late,” Stoudemire said. 

A common complaint about Vogtle is that residential and commercial businesses pay a greater share of the expansion’s bills than industrial businesses.

An Atlanta Journal Constitution article in 2017 cited former president G.L. “Roy” Bowen as explaining how Republican Gov. Nathan Deal and other lawmakers were able to pass legislation by greatly reducing the costs levied on industries.

Mark Woodall of the Sierra Club of Georgia said customers would have been better off with more solar and battery storage than with two exorbitantly expensive nuclear reactors.

Residential customers pay more than four times as much for electricity as industrial customers because of the tariff approved in 2009. 

“Southern Company will make out like bandits from Vogtle 3 and 4 going online,” Woodall said. “It’s $700 million a year in additional cash flow. Residential customers will have the current affordability crisis made worse. Last year, almost 10% of Georgia Power’s customers were disconnected for nonpayment. That is a disaster for the people of Georgia.”

Meanwhile, the meter to get the plant to generate kilowatts continues to run. Georgia Power reported another $461 million in capital expenditures from July to December in its latest Vogtle monitoring report.

In the fall, state regulators are set to hold hearings to determine how much more Vogtle’s expenses should be passed along to ratepayers. According to the company, the latest total capital expenses are expected to reach $10.2 billion, which is $3 billion more than commissioners in 2017 considered reasonable.

Georgia Power officials say they will decide how much more money to seek to recoup closer to the PSC hearings later this year. 

“The company will review all the factors,” said Jeremiah Haswell, project oversight director for Vogtle.

Georgia Power officials and other Vogtle backers say the long road to expanded nuclear power capacity has been worth the wait as the company transitions away from its heavy reliance on coal-fired power plants to cleaner sources of energy for its 2.7 million customers. Last week, Georgia Power announced that Plant Vogtle’s Unit 3 reactor had reached its maximum energy output, which the utility says can power an estimated 500,000 homes and businesses. 

“The coming months will be an exciting time for the state of Georgia, Georgia Power’s customers and numerous individuals who have contributed to the completion of this project,” said John Williams, vice president of business operations for Vogtle. “Vogtle’s unit three and four have begun providing clean, reliable carbon-free energy and will continue to do so for the next 60 to 80 years.”

Georgia Power and Southern Co. stockholder Robert Searfoss is unhappy with how the company manages Vogtle as it drains his retirement funds. 

In 2025, a typical Georgia Power household will spend an estimated $45 more on monthly utility bills because of the Vogtle nuclear expansion as well as fuel and electric rates hikes.

“About $4 billion has been taken from ratepayers in advance and not and only until recently has any electricity come out of that plan,” Searfoss said at Thursday’s PSC committee meeting. 

Commissioner Lauren “Bubba” McDonald, a member of the five-member PSC, said that Georgia Power was allowed to begin collecting interest up front on the capital investments. 

“When (Vogtle) comes online, that’s when the ratepayer starts paying for the cost of the product,” he said. “The surcharge was just to pay the interest so that when it comes on line that interest would not have accumulated over time.”

Busted budgets, delays bedevil Vogtle

For years, the PSC’s own staff and outside consultants have hammered Georgia Power for setting over-aggressive timelines that the company repeatedly missed, driving the project’s costs higher.

Vogtle’s expansion was first approved by state regulators in 2009, with the two reactors originally scheduled to be operational by 2017.  

The project faced a big challenge in 2017 when cost overruns led to contractor Westinghouse Electric declaring bankruptcy. 

Vogtle’s construction was further hampered by work shortages during the pandemic and poor oversight, which resulted in quality control violations.

The PSC and Georgia Power signed an agreement several years ago that set a $7.3 billion cap on construction costs that would require the company to get approval for expenditures over that amount.

Throughout Vogtle’s construction Georgia Power quarreled with contractors and subcontractors over whether the construction problems were caused by shoddy workmanship or other circumstances. 

“Do you think you might still find some costs that you will dispute with contractors to potentially lower the impact of these massive cost overruns,” Liz Coyle, executive director of Georgia Watch, asked at Thursday’s PSC hearing. 

Georgia Power’s Haswell responded by saying “we are going to use every opportunity that we have in the contracts to hold our contractors accountable.” 

In recent years, Georgia Power has been embroiled in battles with its co-owners over Vogtle’s expenses. Georgia Power agreed to take on a greater share of Vogtle’s costs in 2018 as the company’s costs increased. 

Georgia Power owns 46% of Vogtle, followed by Oglethorpe Power Corp. with 30% and the Municipal Electric Authority of Georgia with about 20%. Dalton Electric will own less than 2% of the nuclear expansion.  

Vogtle’s electricity won’t just be used on Georgia’s homes and businesses. Power from the nuclear plant will also be sold to Alabama properties and to Florida customers of the Jacksonville Electric Authority. The Florida electricity supplier was required to pay hundreds of millions as part of an agreement with the Municipal Electric Authority of Georgia in 2008 after it became entangled in legal disputes stemming from initial agreements to pay for power and share in the construction costs.

A company official said last week that Georgia Power would not pass on any excess expenses incurred as a result of agreements with other project partners.

Bob Sherrier, an attorney representing Georgia Interfaith Power and Light, asked how Georgia Power would distribute electricity if Vogtle’s demand increased. The company promoted the plant since the planning stages as needed to supply Georgia’s growing population with electricity.

“Would Georgia dedicate those megawatts to serve customers or do you intend to sell that power on the wholesale markets?” Sherrier said. 

The company won’t make any decisions until it knows how many megawatts of power it controls, Haswell answered.

This story was written by Stanley Dunlap, a Senior Reporter at the Georgia Recorder, where this story first appeared.

Georgia Recorder is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Georgia Recorder maintains editorial independence. Contact Editor John McCosh for questions: info@georgiarecorder.com. Follow Georgia Recorder on Facebook and Twitter.