Residential customers of Georgia's largest electrical utility could see their bills rise another $9 a month to pay for a new nuclear power plant under a deal announced Wednesday.
Georgia Power Co. said customers would pay $7.56 billion more for Plant Vogtle construction costs under the agreement with utility regulatory staff.
The Georgia Public Service Commission's five elected commissioners must approve any deal, but such agreements are typically persuasive. With the commission's Public Interest Advocacy staff and three leading ratepayer groups signing on, the agreement is likely to avert contentious hearings over how much blame the company should bear for billions in cost overruns at two new nuclear reactors southeast of Augusta.
Vogtle's Unit 3 and Unit 4 are the first new American reactors built from scratch in decades. Each reactor can power 500,000 homes and businesses without releasing any carbon. But even as government officials and some utilities are again looking to nuclear power to alleviate climate change, the cost of Vogtle could discourage utilities from pursuing nuclear power.
Jacob Hawkins, a Georgia Power spokesperson, said the agreement represents “a balanced approach that recognizes the value of this long-term investment for the state and recognizes affordability needs for customers.”
Liz Coyle, the executive director of Georgia Watch, a consumer advocacy group that signed the agreement, said the reactors will never be cheaper than alternative sources of power. But since regulators, traditionally friendly to Georgia Power, allowed them to be built, Coyle said it was important to limit consumers’ exposure.
“I believe that this is the best outcome we could get with where we are in this process,” Coyle said.
Public service commissioners declined comment on the deal Wednesday, saying all the evidence hadn’t been heard.
The overall cost of the project, including financing, is currently $31 billion for Georgia Power and three other owners, Associated Press calculations show. Add in $3.7 billion that original contractor Westinghouse paid the Vogtle owners to walk away from building the reactors, and the total nears $35 billion. The overall project is seven years late and $17 billion over budget.
Georgia Power says it has spent $10.2 billion on its share of construction costs for Vogtle Units 3 and 4, built alongside two earlier reactors that have been operating for decades. Public service commissioners originally approved the largest unit of Atlanta-based Southern Co. to spend $4.4 billion. After years of delays and cost overruns, the commission said in 2017 that it would consider $7.3 billion as a reasonable cost for Georgia Power.
In a regulatory filing Wednesday, Georgia Power argued that $8.8 billion of the $10.2 billion had been prudently spent on construction, while $1.4 billion was wasteful and should be disallowed. But the company agreed to give up another $1.3 billion that it could have sought from customers, amid indications that Public Service Commission staffers would argue that even some spending below the reasonable cap was wasted by mismanagement.
The company says that would work out to an additional $8.95 per month for a typical residential customer, atop the roughly $5 that customers started paying this month when Unit 3 entered commercial operation. The further bill increase would begin when Unit 4 enters commercial operation. Georgia Power has loaded fuel into Unit 4 and says it will reach commercial operation by March 30 at the latest.
Utility bills have been rising steeply for Georgia Power customers. Residential customers saw a $16-a-month increase to pay for higher fuel costs two months before the Unit 3 increase. There was also an increase in base rates early this year, with another one scheduled early next year.
It wasn’t immediately clear if Southern Co. shareholders would absorb additional losses under the agreement. The company has already written off $3.26 billion in Vogtle losses since 2018, including some of the costs listed in Wednesday’s regulatory filing.
Georgia Power currently owns 45.7% of the reactors. Smaller shares are owned by Oglethorpe Power Corp., which provides electricity to member-owned cooperatives, the Municipal Electric Authority of Georgia and the city of Dalton. Some Florida and Alabama utilities have also contracted to buy Vogtle’s power.
Ratepayer groups won some other concessions. Georgia Power agreed to double the size of a bill-relief program that currently applies to some low income seniors. Under the plan, projected to add 96,000 beneficiaries over the next three years, seniors who live in households with incomes of less than double the federal poverty line would be eligible. So would people, regardless of age, who get federal low-income housing vouchers or individuals who get federal disability payments. The program cuts average monthly bills $33.50.
Georgia Power agreed to a 50% expansion in energy efficiency programs to help reduce energy use and lower bills beginning in 2026. The company also agreed to support state applications for a share of $7 billion in federal grant funds to expand solar energy to low-income households.
