Southern Co. subsidiary Georgia Power says its share of the project to build Plant Vogtle is projected to go hundreds of millions of dollars over budget. Its 2.4 million customers will pay for the company’s building costs unless regulators force the utility to take losses on questionable spending.
Now the chairman of the Public Service Commission, Chuck Eaton, is asking state lawmakers for roughly $180,000 to fund two more employees to carefully track utility spending and construction efforts. The information those monitors gather will be crucial if regulators ultimately want to block Georgia Power from billing its customers for at least some of the project’s increasing cost.
Regulators are at a disadvantage when contending with Georgia Power, a monopoly that owns a 46 percent stake in the nuclear plant.
Southern Co. earned $852 million in a single three-month period and can afford a small army of experienced attorneys, engineers, lobbyists and financial experts to make its case. By comparison, the PSC has a $9 million annual budget to fund all of its work.
One commission employee is tasked with tracking project spending on a regular basis. Georgia Power also pays for an independent monitor who works for the state and keeps tabs on construction progress.
“It would put us in a better position to go toe-to-toe with them if there are costs that are in dispute in the future,” said Eaton, explaining why he wants additional help.
State lawmakers will consider Eaton’s request as they review budget plans in the coming weeks. Rep. Penny Houston, who leads a subcommittee that oversees PSC spending, said she would support adding the two new monitors assuming extra money can be freed up in the budget.
“When you’re spending billions of dollars, you really need someone watching over it,” said Houston (R-Nashville).
Georgia Power supports the request for additional regulatory staff if state lawmakers feel it is appropriate, company spokesman Brian Green said in a written statement. The company said government scrutiny will show the project is managed efficiently.
“We believe this oversight will prove that any additional investments in the project are prudent and necessary for the long term benefit of customers,” Green said.
Georgia Power made history in 2012 when it received permission to break ground on the first new nuclear plant in a generation. The other plant owners are Oglethorpe Power Corp., the Municipal Electric Authority of Georgia and the city of Dalton. Only Georgia Power is regulated by the Public Service Commission.
Plant Vogtle and an identical facility under construction in South Carolina were supposed to prove the nuclear industry could build without the delays and eye-popping cost overruns so common decades ago. The reactor design has never before been constructed in the United States. Two plants using the same technology are being built in China.
Instead, falling natural gas prices made new U.S. plants uneconomical. Meanwhile, construction costs have jumped. Georgia Power reports that its spending has tracked about $737 million over its commission-approved budget of $6.1 billion.
The reactor’s designer, Westinghouse Electric Co., and the firm building it, CB&I, also want Georgia Power to pay $425 million in additional costs resulting largely from delays in getting federal approval. Georgia Power denies it is responsible for those expenses.