Rep. Jeff Chapman (R-Brunswick) said he will file legislation today seeking to shave the profits of Southern Co. subsidiary Georgia Power if it breaks its state-approved budget of roughly $6 billion while building two nuclear reactors at Plant Vogtle near Augusta.
Electric customers still would reimburse the utility for its actual construction expenses and borrowing under Chapman’s plan. But the firm would earn a reduced profit on any investments that exceeded the state-approved budget. Chapman’s proposal comes as utilities building nuclear plants in Georgia, South Carolina and Tennessee are under pressure to control costs.
As a regulated monopoly, Georgia Power earns a more than 11 percent profit on every dollar it spends on capital infrastructure, including the nuclear plant.
“There’s really no incentive for them to stay within those boundaries,” Chapman said.
Georgia Power spokesman Mark Williams said the company had not seen Chapman’s plan and could not comment on it. Williams said state utility regulators have reviewed and approved all of the utility’s spending.
A draft of the legislation provided by Georgia Watch would require that Georgia Power’s 2.4 million customers reimburse the company for its actual construction costs. However, the utility would earn a much lower return on its investment for any spending that goes over an original $6.4 billion construction budget set by the Georgia Public Service Commission. That cap was later lowered to roughly $6.1 billion after state lawmakers in 2010 permitted the utility to charge its customers in advance for the project’s financing costs.
Problems with two nuclear construction projects in Florida have prompted a legislative debate over a similar system there. Then a state senator, Chapman voted against Georgia’s law.
“I think that lawmakers, had they known then what they know now might not have passed it,” said Liz Coyle, deputy director for the consumer advocacy group Georgia Watch, which supports Chapman’s proposal.
Southern Co. won permission in 2012 from federal regulators to build two Westinghouse Electric Co. AP1000 reactors at an existing nuclear plant in eastern Georgia. It was the first approval of a new nuclear plant since 1978.
A state cost monitor has warned the project is running more than a year behind schedule and faces extra costs in the range of hundreds of millions of dollars.