Vogtle costs too much for customers to bear, PSC staff says
ATLANTA — Members of the Georgia Public Service Commission staff say the Plant Vogtle nuclear expansion project is too costly to finish unless state utility regulators tell Georgia Power and its parent, Southern Co., to absorb some of the skyrocketing costs.
In a strongly worded document filed with the PSC last Friday, the PSC staff said Georgia Power’s now $12.2 billion projected costs for its 45.7 percent share of the project are too much for customers to bear. The commission must take steps to ensure that the reactors — now the only ones in the nation that are under construction — make economic sense to finish, or they should cancel the project, staff said.
Vogtle’s future has been hanging in the balance since late March, when its main contractor, Westinghouse Electric Co. LLC, went bankrupt. The project was already years behind schedule and billions of dollars above its forecast budget, and Georgia Power’s analysis has added time and money to that.
The PSC staff and its consultants have routinely warned that Vogtle’s economics will continue to deteriorate the longer it takes to finish the reactors. Friday’s document is perhaps the most sharply worded criticism about the project since regulators have been reviewing the project’s cost and schedule.
“Assuming the project is completed, ratepayers would incur significantly higher revenue requirements and a reduced economic benefit while the company’s profits would increase,” wrote PSC staff consultants Phil Hayet and Lane Kollen, and Tom Newsome, the PSC staff’s utilities finance director.
They, along with Vogtle’s main analyst and independent monitor, and other stakeholders filed testimony last Friday.
Georgia Power has routinely argued that the delays and cost increases at Vogtle are not the company’s fault. Indeed, Vogtle’s schedule changes stem mostly from increased federal safety standards and a series of contractor problems.
Staff, however, attacked Georgia Power’s management of Vogtle and its contractors, specifically Westinghouse.
“The company’s failure to manage the project in a reasonable manner resulted in repeated schedule delays and increases in actual and projected costs,” they wrote, later adding, “It is unreasonable for ratepayers to have to bear increased costs as a result of the units not being constructed efficiently.”
To be clear, no nuclear project in U.S. history has been built on time and on budget, largely because they must meet strict safety and regulatory standards. It is a key reason why no one has built a nuclear project from scratch in nearly three decades.
The PSC is reviewing the money that Georgia Power has spent over the last six months while weighing the project’s future. Regulators have scheduled a vote for early February unless other outside issues come into play.
Georgia Power spokesman Jacob Hawkins said the electric company is reviewing the testimony and will discuss any areas of disagreement during upcoming hearings.
“We remain confident that the unified recommendation to move forward with construction represents the best choice for customers while preserving the benefits of a new carbon-free energy source for our state,” Hawkins said in a statement. “We also understand that this is a complex and difficult decision and it is ultimately the decision of the Georgia PSC on whether or not we will move forward with the Vogtle project.”
Vogtle is the epitome of politics clashing with economics. The project’s total cost now stands at roughly $23 billion, up from $14 billion in 2008. Georgia Power and the public power companies building Vogtle have told the PSC to let Georgia Power recoup all of Vogtle’s new costs from customers.
If that doesn’t happen, any of the co-owners can pull out of Vogtle, and the project will fail.