GPPF and SB 31

I’m a fan of the Georgia Public Policy Foundation, but I’m disappointed after reading their assessment of SB 31.

They claim that the real risk is a downgrading of Georgia Power’s credit rating. However, experts that have testified before the Public Service Commission, the PSC staff bill analysis and the Fitch Group say or show that a downgrading of Georgia Power’s credit rating is unlikely and not necessarily a “worst case scenario” as supporters of CWIP claim.

The PSC staff also notes, “If and when [pre-payment] is shown to be necessary, the Commission can provide for it at that time.” So, why the need for SB 31 if the PSC already has the authority to allow pre-payment if Georgia Power winds up having its credit rating lowered (again, an unlikely scenario)?

The facts prove that this bill is bad for consumers. Myself, Erick and others against the proposal support nuclear energy, but the Public Service Commission exists for a reason and that includes making though decisions on controversial issues, as anti-America as that may sound.

I respect the GPPF, but they are off base in their assessment of the issue.

74 comments

  1. fishtail says:

    Jason…the Georgia Public Policy Foundation is a pro-business organization funded by big corporate interests in Georgia. Georgia Power, and it’s pals, are big contributors to this operation. GPPF is not “independent”. They hustle for money like all the other think tanks and generally regurgitate what their donors pay them for. Their leader, Rogers Wade, is an old Talmadge hand, and he is expert in these matters. GPPF is a whore to whoever gives them money. Sorry to pop your bubble, but that’s the way it is.

  2. William Gibson says:

    Let’s reveal this for what it is – a GPPF sham! Their Board consists of: one Craig Lesser who served as Vice President of Government and Regulatory Affairs for Georgia Power Company, Trip Martin-Georgia Link – Georgia Power Lobbyist, Jay Morgan-utility lobbyist, McKenna Long Aldridge seems to have quite a strong presence on the GPPF Board and they also represent clients on energy and utility matters. Give me a break. They’ve called out the wolves in sheep’s clothing to go on the defense for this lousy, stinking, anti-Republican bill. Do they think we’re stupid and blind?

  3. Jason Pye says:

    I’m still a fan of the GPPF. I’ve written commentary for them in the past, though I doubt I’ll get to again.

    All think tanks rely on funding for individuals and corporations to conduct studies and research. I don’t hold that against them.

  4. William Gibson says:

    Jason, I get the money part. However, they shouldn’t, call themselves a “think-tank” when they let others do their thinking for them. “Septic-tank” might be more accurate since they are full of ….

  5. Jason Pye says:

    You know, I may be disappointed and disagree with GPPF on this issue but I’m not going to rip them and question their motivation and integrity over it.

  6. chamblee54 says:

    “The facts prove that this bill is bad for consumers.”
    Are these “facts” really numbers supplied by one side or another in this debate? And maybe indicate is a better word than prove.
    Nuclear Power=Big Government.

  7. Jason Pye says:

    This is from Benita Dodd:

    Despite the Obama regime, I WAS SO SURE that we Americans and Georgians still have the ability to disagree with each other without getting the conspiracy theorists involved.

    Thank you, Jason, for sharing your dissenting opinion respectfully. Some of the respondents to your post, however, suggest the Foundation has been bought.

    Foundation supporters and board members sign on because they agree with the philosophy, not because we tailor our philosophy to their support. And they know that upfront. There was NO influence brought on us to write this, nor any to influence our opinion. If you disagree with our research, we encourage you to prove us wrong. Our goal is to promote the best interests of Georgians, not any particular industry, company or individual. And we are proud of of reputation of doing that for 17 years with an untainted reputation.

    Regards,

    Benita Dodd, VP, http://www.GPPF.org

  8. Bill Simon says:

    Benita,

    Good to bump into you yesterday at the LOB.

    However, I disagree with your worry about the potential of a bond rating downgrade to poor, pitiful Ga Power.

    You see, in case you were unaware, Ga Power is a FOR-PROFIT entity, and has shareholders and bondholders earning dividends and interest payments off their capital financing.

    Therefore, it is not the customers of said for-profit entity whose concern it is to be concerned with what level Ga Power’s bond rating is ranked.

    NOW, unless you are in favor of making an entity like Ga Power a customer-owned entity (like, say, an EMC), then you should rethink your position. Because it sounds more like a position of a stockholder or a bondholder than that of being a mere Georgia citizen on the lookout for the interests of Georgians.

    Whether or not the bond rating is a red herring from Ga Power, the customers should not be requiured to shoulder the burden of their corporate management decisions. That smacks of very bad policy and a very bad precedent.

    Cordially,

    Bill Simon
    MS in Finance, Georgia State University
    BME, Georgia Tech
    Registered Professional Engineer (Retired)

  9. jenny says:

    There’s no way Democrats can be in favor of this bill. And GPPF and Georgia Powert have the same sort of relationship as Monsanto and the FDA, by Fishtails remarks.

    This is what I despise about American “capitalism”. It rewards and gives special privileges to big business out of the public coffers and thus the pockets of the little people.

    The federal bailout is earmarked in direct correlation to the different companies’ lobbyist expenses. And when we get this bailout money from Uncle Sam, you can just bet the strings attached are going to be like steel cables reeling all state power right back into the bulbous, bloated, blood sucking leech, that is our current Executive Branch.

    Georgia Power invested in over 70 lobbyists in order to squeeze the public for every possible cent. They were smart enough to ask for more than they actually wanted, so the Senate would pare the bill down to a “reasonable” size, thus giving GP probably what they were after anyway. (Are any prolife organizations listening to this–the ancient bargaining practice of asking for MORE than you want!!)

    This very bad legislation is built upon layers of civil government mechanisms, created over time, which have nothing in common with the principles of limited government and free market economics.

  10. jenny says:

    Ah, thank you voice of reason, aka Bill Simon, for showing up. I was just about to start a cry fest for poor GP’s horrible plight with bond ratings and perhaps having to pay for their own equipment (nuclear power plants) required to stay in business.

    I do not have all those fancy titles. So I will happily defer to your brilliance on this one, and just lead the cheering section.

    Sincerely,
    ~Jenny
    Bill Simon cheering squad
    Prairie Muffin
    Taft Fan
    Uneducated unpaid lobbyist
    Dependent on the Bank of Jon Hodges
    First place winner in the: “nurse a baby and fry an egg at the same time” competition (I know you guys are jealous).

  11. Jon Hodges says:

    Is it really possible to be :
    on the Bill Simon cheering squad
    and
    a Taft Fan?
    deep thoughts by Jack Handy

    Uneducated unpaid lobbyist – Yes this is a problem for the Bank of Jon Hodges, we are currently very low on fiat dollars for Jenny’s Lobbying activities.

    This may come as a huge relief to those legislators that quickly find a corner to hide in as she walks down the halls of the Coverdell building.

    Anybody want to sponsor Jenny?

  12. Bill Simon says:

    Jenny,

    I just used those titles to inform Ms. Dodd that I am not a mere political activist voicing an opinion, but a student schooled well in corporate finance and capital budgeting.

    And, this frigging argument that GaPower might get a “downgrade” of their bond rating just pisses me off more than I can be to just sit idle…and the fact that GPPF just demonstrated their bias disappoints me to no end.

    (Nothing personal, Benita, but you are so wrong on this issue. Please, remove the “conservative think tank” moniker for GPPF. You’re embarrasing yourself.)

  13. Bill Simon says:

    Jon,

    Hmm…you might actually be able to get her to wear a T-shirt advertising a different business each week to get cash flowing in.

    She could advertise:

    Pampers
    Gerber Baby Food
    Trader Joe’s

    These are just off the top of my head.

    True…she will get paid in fiat money…but, it’s slightly better than Monopoly money at the moment.

  14. jenny says:

    Bill,

    I wasn’t making fun of your titles. I was saying “yeah, see, even someone who knows what they’re talking about agrees with me” cuz I don’t really know all these details, and don’t have time to ferret out the information. I’m arguing presuppositionally. My title list was merely to make fun of me.

    I’m impressed that you know Gerber Baby Food is void of GMO’s. Another point for you.

  15. Bill Simon says:

    Jenny,

    1) I know you weren’t busting on me.

    2) I had no idea of the GMO-less nature of Gerber. But, it’s the only brand I could think of. (But, at least give me half a point for guessing :-)

  16. DonnieChaffin says:

    It sounds like the GPPF has done something sorely missing in this discussion – applied logic. The added provisions they suggested address the only valid concerns I’ve read.
    I don’t care what your background is…if you think Georgia Power investors are going to foot the bill for anything, you’re living in fantasy land. Georgia Power is a government-protected monopoly. If they suffer economically in any way, they’ll go to the PSC and the PSC will approve a rate hike.

  17. Jason Pye says:

    Georgia Power is a government-protected monopoly. If they suffer economically in any way, they’ll go to the PSC and the PSC will approve a rate hike.

    Which is why SB 31 is unnecessary.

  18. Game Fan says:

    jenny could become an “anchor babe” not to be confused with an “anchor baby”. So long as she isn’t nursing and “anchoring” at the same time.

  19. Game Fan says:

    Or maybe host a type of “Oprah” talk show. Do y’all have any talents? I can do the robot OK for a white man although I’m a little rusty.

  20. DonnieChaffin says:

    Unnecessary in the sense that Georgia Power and its investors will be fine either way. The question is whether or not it’s good for the ratepayers and that’s where the debate should be centered. We can do without the conspiracy theorists and the supposed experts who have no understanding of the business model.

  21. Jason Pye says:

    Yeah, those pesky experts who know credit ratings and finance should be ignored.

    This discussion has always been about the best interest of ratepayers. Others arguments that have come along have benn addressed as well.

  22. Bill Simon says:

    We can do without the conspiracy theorists and the supposed experts who have no understanding of the business model.

    Yeahhh…let’s discuss that business model, shall we:

    1) Ga Power is a publicly-owned utility and part of The Southern Company.
    2) The customers DO NOT vote on who sits on the board of the Southern Company or who is hired to run Ga Power.
    3) The customers have absolutely no say in how the utility runs itself,
    either day-to-day or on a strategic basis.
    4) The utility is a FOR-PROFIT entity whose profits get distributed,
    ultimately, to shareholders who have invested their money into the
    preferred stock.
    5) NONE of the profit is shared with the customers…EVER.
    6) The argument regarding the utility’s “bond rating” is a false echo in the echo chamber of the GPPF. Today’s bond rating, yesterday’s bond rating, and any future bond rating is all a direct result of the
    decisions of management that the customers have NO SAY in the hiring, firing, or management thereof.
    7) Therefore, it is 100% crap that GPPF should be arguing that the “bond rating” should be of concern of the customers of Georgia Power.

    Whoever wrote this displays a lack of understanding of the separation of a customer from a supplier of goods and services…and it should concern all of us in terms of relying on GPPF to provide sound, “conservative based thinking.”

    NO true conservative would be sitting here concerned about the bond rating of an entity in which the public good has ZERO involvement in, and is actually is a captive prisoner of that entity’s service.

    8) After construction is completed, there is no “lump sum” due to be
    paid in a year. It is a lump sum due to be paid back over 30-40 years.

    9) The dollars that households have right now (and will have in the time period of 2011-20??) are more valuable to THEM in their management of their lives (especially with job losses and HH income being slashed) than to pay money to “save” on interest later.

    Donnie, if you are so concerned about “saving money on interest” then make sure you recommend to everyone YOU know to go get their homes re-fied to be the shortest term possible so as to “save interest.”

    Practice what you preach.

  23. Bucky Plyler says:

    My state rep. (D) says that he does not favor SB31. However, he also said that he is listening to the voters. He remarked that I’m the first (only?) citizen to call from our district.

    CONTACT YOUR REP TODAY.

  24. DonnieChaffin says:

    It’s publicly-owned and government-controlled. Sure, profits will be distributed to those who invest their money with them, but everyone knows there’s a limit to the level of profit they will be allowed to make. If they make too much, they won’t get another rate increase until the money’s gone.

    As to your suggestion Bill, I would recommend to everyone to go get their homes re-financed to the shortest term possible that they can reasonably afford. The entire mortgage crisis is due to morons who took on more debt than they could afford. Recent home buyers rolled everything into their mortgage…things like the cost of their construction loan, a term foreign to anyone below the age of 30. And then they’re shocked when the market takes a downward tick and they owe more than their house is worth. The ratepayers are going to pay for these reactors and it doesn’t take even a mediocre scholar to figure that out. We can start paying the interest on the construction loan now or we can let it ride and pay it all later. Frankly, our government has saddled my children and grandchildren with more debt than they can handle already. I don’t want to add to it.

  25. Technocrat says:

    You are missing the point. The problem is not about financing the measely 2 KNOWN new reactors PROPOSED TODAY, but the other 30 reactors in the planning stage to replace the coal and natural gas fired plants.

    We have 4 reactors [4,042 MW] now supplying 11% of Georgia power needs.
    “71 electric power sector plants (comprising 293 generating units) operate in Georgia. “

  26. William Gibson says:

    Ahhh Donnie,
    Ignorance is bliss. The PSC would approve a rate increase for the company if they ask – period. Stan Wise, Doug Everett, Lauren Bubba McDonald and Chuck Eaton are all inclined to support the people who pad their campaign coffers. Your statement that “they won’t get another rate increase until the money’s gone” is absurd. They’ll get a rate increase whenever they want one and they’ve got four puppets more than willing to hand it over to them.

  27. Bill Simon says:

    Donnie,

    So, let me ask you: Should you start being assessed property tax on a house that has only broken ground but not yet completed?

    I’m pretty sure your answer is “No” on that question. But, essentially, it is the same concept. Ratepayers start getting assessed a fee for a project that has not been completed yet.

    AND…it is a construction project in which the people managing it have ZERO motivation to make sure it is a well-managed project from a financial standpoint. After all, their money isn’t on the line.

  28. DonnieChaffin says:

    You’re right Bill. The answer is no and that’s a poor analogy. It’s more like paying the interest on a construction loan, which is one of the provisions GPPF suggested. No matter how this is handled, their money is not on the line.

  29. Jason Pye says:

    It should be noted that Donnie was defending Georgia Power before GPPF ever published this commentary.

    Bill, you absolutely driven home the issue. Nicely done.

  30. DonnieChaffin says:

    I wasn’t so much defending Georgia Power as I was disputing the fallacious and illogical arguments I was reading. I’m not sold on SB 31, but the concept of paying as you go versus letting the debt compound seems fiscally responsible to me…particularly when no one can articulate evidence to the contrary.

    I realize I’m in the minority here. After all, the rich, evil corporations are out to screw us all and we need a government entity to protect us. I shouldn’t have used my real name because now one of the conspiracy theorists will expose me as the 71st lobbyist.

  31. fishtail says:

    One other thing about SB 31…Ed Holcomb, chief of staff for Gov. Perdue, is the former chief lobbyist for GA POWER. One of my lobbyist pals says that the GA POWER lobbyists regularly hang out in Holcomb’s office. Has Sonny issued a policy statement on this legislation?

  32. DonnieChaffin says:

    I agree Daniel and that’s the real answer. Abolish the PSC, allow competition in the energy markets and let the power companies charge whatever the market will bear. Then you will have an interested investment community that would be willing to fund projects like this because there would be potential for significant reward.

  33. Icarus says:

    “Anybody want to sponsor Jenny?”

    I can think of many 12 step programs that I’d like to sponsor Jenny for.

  34. Icarus says:

    But to the issue at hand,

    I’m very disappointed in the turn of debate here over the last couple of days with an effort by some to make this personal, either by claiming a certain Senator was bought, or that the members of the GPPF are shills for their donor base.

    For the record, I’ve been a member off and on of the GPPF for about 15 years, and many of the folks mentioned above, as well as others related to the GPPF but not mentioned, as some of my oldest friends in politics. You can have honest disagreements with others without having to assume that someone else came to a different conclusion than you did because they were bought.

    While politics, big business, and other exercises in the control of money and power are naturally open to manipulation by unethical means, to jump to the conclusion that this has happened as a first and primary response only seeks to reinforce the natural cynicism the public has in politics today, and is one of the main reasons that the candidates we wish would seek office do not.

    I disagree with the GPPF’s conclusions. I can and will do so respectfully (as others have also done above) without reverting to calling their (or their donors) ethics into question.

  35. Jason Pye says:

    Come now, Donnie, I’m not accusing you of anything and I’m not arguing for more government.

    If the legislature passes SB 31 they should dissolve the PSC as well. But like Icarus says, there is no reason to question motives of the GPPF.

  36. Pro Nuke says:

    Jason,

    Thanks for the info on GPPF and their stance on SB 31. I agree with their assessment and appreciate their very accurate explanation of the costs for recovery during construction proposed by SB 31 as being the cost for financing and not the total construction cost which is recovered over the life of the plant. Some contributors to the Pundit blog seem to continue to get these confused. Avoiding the inclusion of the financing costs into the final bill will indeed lower the overall impact to the rates we are to pay later.

    The credit rating of GPC as the plant progresses could indeed be affected if the financing charges are not collected during construction, heaping interest upon interest to pay the bill. This most certainly was one of the contributing factors to the cost of Vogtle 1&2 and can be verified by reviewing the GPC rating history during that construction period through any good rating agency such as The Fitch group which you have referenced. Reviewing their current rating by Fitch ( A ) , which you have provided , I note their expected disclaimer “Fitch’s Stable Rating Outlook assumes GPC will supplement internal cash flows with a balanced mix of debt and equity to fund capital spending and other cash needs.” so nothing is permanent. The balanced mix is critical.

    Finally, we are fortunate to live in this area where our current rates are among the lowest in the nation. SB 31 will assist in helping to keep them that way. Thanks to GPPF recognizing that.

  37. DonnieChaffin says:

    Yeah Bill, it’s a real name…not mine, but I saw it in the phone book and liked the way it sounds.

  38. “NO true conservative would be sitting here concerned about the bond rating of an entity in which the public good has ZERO involvement in, and is actually is a captive prisoner of that entity’s service.”

    Bill, that whole post of yours had me rolling. I mean, I agreed with you 100% (don’t have a heart attack) — but I kept inserting the words FeCENSORED ReCENSORED in place of “Ga Power”, and in so many places, it worked so well. You made my day. :)

    I’d say more, but Erick would ban me.

  39. “Abolish the PSC, allow competition in the energy markets and let the power companies charge whatever the market will bear. Then you will have an interested investment community that would be willing to fund projects like this because there would be potential for significant reward.”

    Donnie, I like how you think. Nailed it.

  40. Jason Pye says:

    SB 31 will assist in helping to keep them that way. Thanks to GPPF recognizing that.

    In your review of the information I provide you overlooked the fact that the PSC already has the authority to allow for CWIP and Georgia Power can make a case if its credit rating is ever threatened, again, an unlikely scenario.

    SB 31 serves no real purpose, other than subverting PSC authority.

  41. gawatch says:

    GPPF states that Georgia Power “is indeed at risk of a credit downgrade,” and then – with no financial analysis at all – concludes that Georgia Power should recover its construction financing costs. GPPF provides no analysis of which years between now and 2017 that Georgia Power is at risk. It provides no analysis at all of how much additional cash flow, for example, Georgia Power needs in any of those years to avoid a downgrade. And it provides no analysis at all of whether there are other ways to improve Georgia Power’s financial ratios that do not, at the same time, decrease the Company’s incentives to control the Vogtle costs.

    Instead, GPPF simply jumps to the conclusion that prepayment of 100 percent of the construction finance costs in every single year of construction is the magic number. Presumably, a dollar less and the Company gets a downgrade. But a dollar more is completely unnecessary.

    How does GPPF know that prepaying only half of the construction finance costs would not be enough to prevent a downgrade? How does GPPF know that prepaying only a quarter would not be enough? How do they know that prepayment in only certain years is not enough? How does GPPF know that paying down Georgia Power’s enormous $786 million (estimated) fuel balance, rather than prepaying construction finance costs, would not do the trick?

    The answer is, they do not know. They are just guessing with no review of the underlying numbers. Should the Georgia Legislature make customers prepay $2 billion on a hunch?

    Rating services don’t make their decisions on mere hunches. While they use subjective measures, such as the history of the regulatory agency in allowing fair recovery of costs, they also rely on cold, hard financial forecasts. They look at a variety of financial ratios to determine a company’s health. Different financial ratios equate to different credit ratings. If a ratio based on cash flow, for example, is projected to dip too low, one can estimate how much additional cash is needed to deal with the problem.

    Is that what GPPF did? Did they tailor their “solution” to their “problem?” No. They just assumed that 100 percent prepayment every single year of construction is the right number.

    These projected financial ratios are apparently part of the record at the PSC, but they have all been claimed as “trade secret” by Georgia Power. So, only Georgia Power, the Commission and certain parties to the Vogtle case have actually seen them. GPPF has not seen them. The General Assembly has not seen them. They have done no fact check to make sure that the problem is real. They have done no fact check to make sure that their “solution” is necessary or appropriate. But, let’s not let the facts get in the way of the 70-plus registered lobbyists.

  42. Bill Simon says:

    GPPF will now become as relevant to the world of conservative think-tanks as The Southeastern Legal Foundation has been to the world of conservative law over the past however many years, since Shannon Goessling started running it as though it was an arm of the Christian Coalition.

    I.E., no relevance at all. Adios, GPPF.

  43. DonnieChaffin says:

    Pardon me for asking Bill, but I’m new here. Do you fancy yourself as a conservative voice? Because someone who’d rather let interest on a loan run rather than pay it as you go doesn’t sound like one to me. You must be one of those new conservatives I keep hearing about.

  44. Bill Simon says:

    Donnie,

    The subject of the interest rates is interesting, but quite the red herring in this matter. As I stated before (which, as I recall, YOU responded in the affirmative), if it is such a good idea for the customers to have their financing costs amortized over 6 years rather than spread-out over 30 or 40 years, then every state senator who voted for this should take themselves to their local mortgage broker and re-fi their own house to shorten the term to pay-off their homeloan.

    The fact is, none of them will. Why? Because of household cashflow, Donnie. Do you know what cashflow is? It is the amount of cash coming into a household in order to pay for a household to operate itself.

    Those senators think the following:

    1) The estimate of $1.30 per month per HH is a cheap number that every HH can likely afford.

    As the conservative that I am, I know those estimates by Georgia Power are completely meanningless (i.e., too low) and, since their money/their capital will not be on the line, they can piss away all the money in the world on overruns, internal graft and corruption, and not have any care in the world from their stockholders. Why? Again, they are never responsible because it is embedded in state law that they can keep sucking money from ratepayers.

    If you are truly a “conservative,” you should be aghast at the prospect of paying for something in advance when the thing you are paying for has ZERO upper limit as to the costs you will be on the hook for.

    By the way, this is not a “conservative” issue. This is an issue that actually leans to the concept of “socialism” to allow a monopoly to have no responsibility to anyone, or any authority, to actually manage costs.

    Interest costs are minor compared to the costs of principal that will come that will be far above the current estimates of “$6 billion.” We’re talking about a utility here…a business that is guaranteed a minimum and maximum return on investment. They do not need any other financial help than what they already have.

  45. Game Fan says:

    Re:
    “Bill, you absolutely driven home the issue. Nicely done.”

    Bill
    Do you feel a little “yucky” after that virtual “slap on the back” because I know I do. I’ll give Taft a pass on his kudos because it contained some substance.

  46. DonnieChaffin says:

    Bill, you may be a finance expert, but your logic needs some work. You are arguing that the GPPF will become irrelevant in the world of conservative think-tanks because of this postion on one hand and then you say this isn’t a “conservative” issue. That doesn’t compute. Furthermore, you admit (correctly) that Georgia Power is “a business that is guaranteed a minimum and maximum return on investment”, which means there is no real reason for them to manage costs no matter which way this goes. Even if it turns out this thing cost 10 times what they’re estimating, I’d rather pay $13.00/month now than to let that $150 /year compound for several years and then have to pay it all back later.

  47. Bill Simon says:

    Donnie,

    The one key difference is this: If it was THEIR money that HAD to be carrying the interest costs and construction costs, they would not be be wishing to tarry too often in the projected 6-year timetable. Because if are unable to begin to “recover costs” until they actually finish and have the plant certified by the NRC, they will be more focused on finishing their construction work on time so that they can then recover their costs.

    Your “$150” amortized over 30 years is a nothing number. BUT, if Georgia Power is playing with the “house money” (a term that describes funds that are not your own), they have no incentive to finish on time or on budget…and, as the budget increases, so will the interest increase because of higher financing costs.

    AND…GPPF should have just kept their mouth shut on this issue as it is NOT a “conservative” issue, but a complete non-conservative end-around on the authority of the PSC.

    By even offering his misinformed opinion, Kelly McCutchen has demonstrated a clear lack of understanding of the separation of powers in this state…and is encouraging MORE overstepping of boundaries by other branches of government.

    Conservatives (other than me) bitch and moan a lot about about the judicial branch of government “making law” rather than interpreting laws. Well, this is a case of the legislative branch engaging in the process of interpreting law wayyyyyyyyy above their pay grade and abilities.

    The PSC is the only entity that should be considering or examining any element of this issue. If they decide in favor of Georgia Power, then at least the decision was reached by using the proper legal avenues and process.

  48. Icarus says:

    “I’d rather pay $13.00/month now than to let that $150 /year compound for several years and then have to pay it all back later.”

    First of all, I’m having trouble keeping up. Are you “Pro Nuke”, “Freeze To Death”, or one of the other 30-70 (lost count) lobbyists that have been hired to grace us with your presence for your “earned media” campaign?

    Now, to your often obfuscated point: I have an opportunity cost of my funds, whether $13 a month now, or $13 a month plus compounded interest later. You are trying to tell me and the other rate payers that we’re better off if we pay this today.

    Here’s the problem:

    I am not a debt free consumer. I’m going to bet that over 95% of GA Power’s consumers are also not debt free.

    So, if I have an “extra” $13 a month, (we have to assume this money is extra, don’t we, since you keep throwing the number around like it’s just a rounding error. Funny that GA Power feels the need to have so many people twisting arms for such a small dollar amount, by their logic…)…Anyway, we have this extra $13/month, and you are assuming there is no cost for it. But because I’m not debt free, we have to understand that my opportunity cost is the HIGHEST amount of interest I am currently paying on any borrowed money. Let’s just assume that for most GA consumers, that’s 18%. So, by paying you that money, the average GA consumer is going to have to pay credit card rates of 18% on this money that could otherwise pay down their personal debt.

    GA Power, on the other hand, can borrow money from the bond market at very attractive rates. Haven’t dipped into that pool lately, but let’s just say it’s at 6% (and I think I’m guessing high). Now let’s all understand that as a business, GA Power can deduct this money as a business expense from their income, and for our exercise, let’s assume that they pay 33% in taxes. Thus, the effective rate is 4%.

    Now, that 18% I’m paying on my credit cards isn’t tax deductible, so I’m stuck paying that if we approve this plan to let GA Power take that extra from me now, for a plant that may never come on line. But if GA Power finances the plant, the effective rate that they will capitalize interest to me is at 4%.

    So the question to me as a consumer is, Am I better off if I pay 18% interest on something now that I may never get, (SB 31 solution), or if I let GA Power pay interest at an effective rate of 4% and capitalize that, and let them charge me the compounded rate if and when they get this plan on line (the proposal in front of the PSC).

    Your “no brainer” continues to tell me that GA Power and the GA General Assembly assumes that the voters/consumers have no brains.

  49. Bill Simon says:

    Icarus…you are SO awesome and super-duper! Introducing the “opportunity cost” concept into this is just purrrfect.

    Now, I doubt Donnie here will understand that since his job, as A#1 Lobbyist for Ga Power, is to completely obfuscate the issue…and, quite honestly, I doubt that he has ever been introduced to the concept of “opportunity cost” and what it means.

    (I wonder…are we talking to a direct-hire of Ga Power here, or one the Georgia Link boys?)

  50. Icarus says:

    Evening Bill.

    I am super, thanks for asking.

    We shouldn’t give Donnie such a hard time. I’m sure he just dashed in from his afternoon beer pong game on the front lawn, and decided to check the computer in between showering and covering himself in Axe body spray before hitting the town with his other frat brothers tonight.

    You would think that instead of GA Power putting the quantity of frat-boy reject lobbyists on their payroll for this one, they might have just decided on a couple of quality. Or at least, God forbid, one or two that would make a half-assed attempt to understand the audience they were writing for during their grass roots/earned media part of the campaign.

  51. Thank you for bringing this up, Icky and BS. Opportunity cost is a core, defining concept of economic science. The early Austrian economists are generally credited with the discovery of the concept and its early application. In fact, in Mark Thornton’s Richard Cantillon and the Discovery of Opportunity Cost, he shows that Cantillon, the father of economic theory and method, developed and applied the concept of opportunity cost. His “intrinsic value” was not an objective cost approach, but merely an attempt to estimate opportunity cost. This finding exonerates Cantillon from the charge of objective cost theorist and predates the discovery of opportunity cost one hundred and forty years earlier. Had his readers, including Adam Smith, properly understood him, a gigantic cul-de-sac in economic theory — the labor theory of value — could have been avoided.

    The “father of modern economics,” said Austrian economist Murray Rothbard, was a “gallicized Irish merchant, banker, and adventurer who wrote the first treatise on economics more than four decades before the publication of the Wealth of Nations.” Cantillon, believed to be born in about 1680, most likely in Ireland, immigrated to Paris, and later on, moved to London, where details of his life are somewhat fuzzy.

    In fact, I’m thinking that Austrian Economics should be renamed Irish Economics. Karen De Coster has a great writeup on him here.

  52. Icarus says:

    Jesus H Christ.

    Another threadjack whereby Taft decides that any economic application comes from the people who think New Coke is a conspiracy.

    Constitution. Constitution. Constitution.

    ::downs tequila bottle::

  53. Wow, Icky, sorry to piss on your cornflakes. You introduced a great concept into this discussion, and I made a side comment related to it. Then you go all Konop on me about “threadjacking”. Methinks you ate the worm a lot earlier tonight.

    Dang, I didn’t even mention the FeCENSORED ReCENSORED. Take a chill pill, dude.

  54. It’s always used as a profanity. The expression implies that the Christ is a surname rather than a title (Christ comes from the Greek christos meaning “anointed”). The most widely accepted explanation is from the divine monogram of Christian symbolism. The symbol, derived from the first three letters of the Greek name of Jesus (Ιησούς), is transliterated IHS, IHC, JHS or JHC. Since the transliteration IHS gave rise to the reverse acronym Iesus Hominum Salvator (Latin for “Jesus savior of men”), it is plausible that JHC similarly led to the profane expression that Icky decided to bestow upon us all.

    Hey Icky, what’s next? Making fun of Bill’s last name for being too Jewish? Or do you have some other dose of religious intolerance up your robe?

  55. Bill Simon says:

    Say, Taft? Rumor has it that you are Bill Green. Now, if you are, then you should know that that dude that sidled-up to you and BJ the other day toting a rolling cart was me. :-)

  56. Icarus says:

    You, the one with the fear of “the bankers”, are going to accuse me of religous intolerance? I realize you have a problem of trying to remove specs from others eyes while having a plank in yours, but you’re really getting a bit rich here.

  57. Icky, if you are trying to say that “the bankers” are all Jews — good grief, man, do you also listen to “Flight of the Valkyries” all day, while hand painting small statues of eagles?

    I have no “fear of ‘the bankers'”, Icky. I have respect for our Constitution. I also have a lot of Christian AND Jewish friends, and a number of them are rather offended by your comments so far. Rethink them, please.

  58. DonnieChaffin says:

    My apologies to BS and Icarus…you are absolutely right. It is much better for the average American to pay down his 21% credit card debt than the $13/month (grossly exaggerated to allow for hideous cost overruns). I sometimes forget that the average American lives hand to mouth and is up to his eyeballs in debt.

    Hay Jason – did you catch the lobbyist accusations. I knew they were coming eventually. I get all nostalgic when I think back to when you had to have half a brain to be on the computer.

    I don’t even know what a “beer pong game” is.

  59. Chris says:

    Bankers aren’t all Jews. That’s Hollywood. Bankers are all descendants of the Knights Templar and the Rotshchild Dynasty.

  60. Bill Simon says:

    I sometimes forget that the average American lives hand to mouth and is up to his eyeballs in debt.

    Ill-informed state senators appear to have either “forgotten” OR were never aware of it as they don’t have to worry too much about paying for meals by themselves.

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