Restore state advocate to represent families, small businesses

The following op-ed, written by Dan Cupertino, was sent along to me for publication here at Peach Pundit. Mr. Cupertino is a Georgia Power customer and has been a Fayette County resident for more than 30 years.

There’s an ongoing injustice to millions of consumers and small business owners in Georgia that Gov. Nathan Deal and the Georgia General Assembly can set right this year: Restore funding to the Consumers’ Utility Counsel (CUC), the state agency that championed the cause of residential and small business utility customers in million- and billion-dollar cases heard before the Georgia Public Commission (PSC). This voice has been silent for nearly four years, and it has cost us plenty. For example:

  • Rates have skyrocketed. Georgia Power customers are paying $356 more a year in electric bills than four years ago. In 2010, the PSC approved Georgia Power’s request for the largest rate increase in history, $2.1 billion over three years.
  • In 2009, the Legislature passed Senate Bill 31 requiring consumers and small businesses to pay $1.7 billion in pre-financing costs for two new nuclear reactors under construction at Plant Vogtle – $1 billion of which is profit Georgia Power will earn before these units generate any electricity. This is the “Nuclear Construction Cost Recovery” fee we now all see on our bills – a fee which will continue to increase annually until 2015.
  • In 2010, the PSC approved both Atlanta Gas Light base rate increases and riders for infrastructure improvements. The base rate increase is $26.1 million. The riders alone will cost ratepayers $400 million through 2025, about an extra $3.13 on our monthly natural gas bills.

It all adds up, painfully so, at a time in our economy when we ratepayers can least afford it.

The CUC was unique in its role as public advocate. The PSC is charged with balancing the interests of ratepayers against those of the investor-owned utilities it regulates – including Georgia Power and Atlanta Gas Light Company. But the CUC’s purpose was representing the consumer’s side and making sure the PSC and the public knew how utility proposals would impact households like mine and small businesses in Georgia.

In 2008, though, then-Governor Sonny Perdue and state lawmakers gutted the CUC’s funding in the budget, effectively silencing millions of residential and small business ratepayers. Since that time, utility costs have surged and the interests of ratepayers have been left behind.

I ask Gov. Deal to follow up on his campaign commitment when he responded to a question about restoring CUC funding by saying, “Yes, I do support the restoration of funding for the Georgia Consumers’ Utility Counsel. I think it is important to have advocates on behalf of not only residential but small business rate payers. I do think that we need a system that is open in terms of everyone’s point of view.”

I applaud the Governor for his position on this matter, and I agree wholeheartedly. The National Association of State Utility Consumer Advocates [NASUCA] says 80 percent of states fund the work of a ratepayer advocate. Let’s get Georgia – and our utility costs – back on track.

I also ask the General Assembly to fix the problem it helped create in 2009 when it sidestepped the PSC and approved SB 31. The bill essentially gave Georgia Power taxpayer-paid, pre-financing and $1 billion in early profit on nuclear units not scheduled to produce electricity until at least 2016. And that’s assuming the construction is on time and on budget.

I ask Georgia lawmakers to protect consumers from cost overruns by directing the PSC to make a downward adjustment to the percentage of profit Georgia Power can earn on Plant Vogtle costs that come in above the $6.1 billion price tag the PSC already certified. As it stands, Georgia Power can now profit up to 12 percent for every dollar that it goes over budget. That’s no incentive to keep costs from ballooning.

Why do we need legislation to direct the PSC to do this? They had a proposal this past year to hold Georgia Power accountable for spending more than it said it would and to protect ratepayers. The plan would have limited profit on overruns, but not erased it all together. Still, the PSC did nothing. And the advocate for the consumer and small business ratepayer – the CUC – wasn’t there to call them on it.

Utilities are a necessity, not a luxury. Georgia Power and Atlanta Gas Light ratepayers are captive customers. We need a utility advocate, and we need protection against Georgia Power cost overruns at Plant Vogtle.

3 comments

  1. seekingtounderstand says:

    A person could win an election just on the issue of BUFORD GAS and its policies towards customers. So complain all you want and realize that the utitlities owned by governments are far worse and we can not shop rates.
    The 1987 de-regulation of natural gas needs to be repealed.
    When government uses utitlites as a way to stealth taxation you can not blame everything on GA Power who in many cases is fighting them to stop abusing there power.
    If local and state took out the stealth taxation, your bill would go down in half.
    Your not fighting GA POWER your fighting governments hand is your pocket. And desperate are they so plan for higher costs.

  2. kwhman says:

    OK, I can’t resist.  There is a point in the post above that I have to offer my two cents on.  But before I do, and for what it is worth I spent most of my career in the power industry with Georgia Power.  Now I spend time in retirement. Among other things, I have time for some on-line reading about that business and sometimes I encounter what is mis information at most.  (Guess that is the nature of the internet)  

    From my experience, Jason makes good points about CUC, as well as the failed experiment that was gas deregulation.  I do take exception, however, with the points on the “Nuclear Construction Cost Recovery”.

    The best explanation I heard on this issue is comparing it to the silliness of Rooms-To-Go ads. “Shop today, No payments until 2017.”  Please.  Most everyone knows that the financing cost is just built into the price of the furniture.  

    There is no free lunch and Vogtle is not a couch.  It is a $14 billion dollar, several year-long construction project that has huge interest costs for the construction loan. The point you never hear is that customers would have likely had to pay more (hundreds of millions more) for Vogtle if they couldn’t have started paying down the interest on the loan early.   And guess what, at the end of the project Ga Power could have legitimately asked for approval for the construction cost plus all the compounded accrued interest, and made a larger profit on it all.  That is the reality of business economics.  Pay me now, or pay me more later.  

    It is very easy to complain that current ratepayers should not be paying for something that isn’t even built.  I look at it as an investment that will benefit the State of Georgia in the future because of the interest savings and in fact that same cost recovery mechanism will benefit my daughter.  Yes I am a retired Georgia Power employee and I’m proud of it, but facts are facts!

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