Anyone Shocked That Plant Vogtle Is Over Budget?

ACJ business writer extraordinaire Kristi “E” Swartz wants to make sure you have a reason to drink your lunch today:

Despite promises from the nuclear industry to regulators and consumers that they learned from mistakes of the past, the nation’s first two nuclear reactor projects built from scratch in 30 years are headed toward hundreds of millions of dollars in cost overruns and months, if not years, of delays.

But let’s jump to this paragraph to bring this back to Georgia politics, just a few weeks before elections.  You may need to remember it when you go to the polls.

Georgia Power customers currently are paying the financing costs of Vogtle’s twin reactors. They will begin paying the construction costs of the project when the reactors start producing power, currently scheduled for 2016 and 2017. Georgia Power says its $6.1 billion share of the $14 billion project has not increased and maintains that the project is on schedule.

A slight correction is in order. “Some” of Georgia Power’s customers are paying in advance.  The legislature, at the hands of the State Senate and most specifically Don Balfour (R-GA Power), exempted large commercial users (like his employer, Waffle House) from the rate hike.  Well, virtually anyone with a lobbyist at the capital was exempted from the rate hike. 

Small business and residential  customers like you and me (i.e, the little people without lobbyists) are paying Georgia Power, right now, a one billion dollar advance profit (a return on investment on the entire cost of the plant that was deemed a financing cost by the legislature) on power plants that have barely begun construction, don’t have a firm date when they will begin delivering power, and are still in redesign as they’re being built so we don’t know what the actual cost is.

We have a Senate led by folks who constructed the T-SPLOST and now say they’re against it.  They are laundering their own campaign funds to circumvent campaign transparency.  And they have on their hands a $1 Billion dollar gift to Georgia Power from you and me, but not for their friends that can freely exceed $100 gift caps.

Someone please help me make the case to re-elect any Senator that was elected prior to 2010 again?


    • Charlie says:

      Funny thing about WordPress. Spell check doesn’t work on headlines.

      Alternate comment:

      You want accuracy over speed?

      Actual comment:

      Got it, thanks.

        • Bob Loblaw says:

          Agreed on headline. Agreed on lack of noticeable shock. Are they still charging sales taxes on the financing costs we’re ponying up?

          • Charlie says:

            Just for those of us unlucky few who aren’t large manufacturers with larger lobbyists and an even larger Senator in our back pocket.

  1. Max Power says:

    Georgia Power screwing Georgia rate payers, color me shocked. Also there’s gambling in Casablanca!

    • Calypso says:

      How did I just know you with your screen name was going to comment on this particular post? 🙂

  2. ZazaPachulia says:

    Who is running against Balfour, do they have a chance to win and where can I send my check? Same for Chip Rogers.

    • Calypso says:

      Travis Bowden
      Steve Ramey

      Both are primarying Balfour. Repub primary is the only place Balfour can be beat. The district is heavy ‘R’ and he will easily win the general if he makes it through the primary.

  3. Jackster says:

    So let me get this straight, just under a year ago, the terms for the risk sharing proposal were ruled upon :

    Since then, we’ve had one major expense which was deemed to be okay to charge to rate payers, and here now we have another on the horizon in the form of a settlement between SoCo, its vendors, and its partners.

    Personally, I’m already at my capacity for topics I’m supposed to be an expert on – first it was transportation funding and planning, then it was ethics reform and transparency, now here we are back at contract negotiation and federal mandate compliance.


  4. Pamdavidson says:

    And who played utility lobbyist at the capitol to quarter back SB 31? Stan Wise.
    Who voted for the pre-pay at the Commission? Stan Wise
    That’s why we call it the Stan Tax!
    Who voted against the risk sharing mechanism? Stan Wise
    Who received 91%of his money from utilities? Stan Wise
    Who received a whopping 14,000.00 in gifts between 2005-2011 Stan Wise.
    Takin’ care of share-holders in New York instead of rate-payers in Georgia.

  5. IndyInjun says:

    Is opposing the imposition of rate increases for ADVANCE PROFITS the same as opposing the Vogtle project? I think not.

    Let’s do a little math. Advance profits of $1 billion divided by 830 permanent jobs = $1.2 million advance profits per job.

    Count me with Charlie on questioning why incumbents should be reelected.

    • Harry says:

      I’d still like to know what her position is on Vogtle and nuclear power – with or without the mandated ratepayer advances. I have the thought that she may be a bit too green in her ideology. This is a valid concern. In Germany the Greens have managed to get that industrial country to eliminate nuclear entirely in the near future, which is totally unfeasible if they want to remain an industrialized country. They managed to force the elimination of a Georgia Power biomass pilot project in East Georgia on the grounds it was not carbon-neutral – in their opinion, that is.

    • Charlie says:

      Absolutely not.

      It IS inappropriate to have the legislature add “return on investment” to the definition of financing costs. That’s “profit” on the cost of building the new plant.

      It IS inappropriate for those financing costs, which GA Power pays a significantly lower interest cost than consumers, to be paid by consumers before the plant’s design has even been approved.

      It IS ESPECIALLY inappropriate to then exempt large commercial customers to have to pay this cost, so that only the little people – you know, those pesky people without lobbyists but are just voters – have to cover the costs.

  6. Personally, I’m not opposed to nuclear power. I think we have to consider any method of electrical generation taking into account all of the associated costs. Nuclear seems like a great resource for baseload power. But do we need more baseload power right now or in the near future?

    Georgia Power apparently has so much extra baseload power right now that they’re pushing their nights and weekends program which sells power at 5 cents per kWh. So if the hours of 2 pm to 7 pm are their peak hours where they really need electricity, what do we have available to use between those hours? You know, the hottest hours of the day when the sun is shining and everyone is running their air conditioners on full blast? A resource which can be captured and turned into electricity at the point of use for $5 per watt or less and doesn’t even require transmission system upgrades? Something that can be installed within a matter of weeks, not years? Solar.

    I’m a big fan of 3rd party power purchase agreements and think the General Assembly needs to legalize them now. It’s past time that we open up the free market. Republicans talk about being free market, but then they fail to open it up. Maybe it has to do with the 70+ lobbyists that Georgia Power sent to lobby against the bill that would legalize them. (And where do you think Georgia Power gets the money to pay those lobbyists? Ratepayers.)

    Furthermore, as to the financing, the numbers I’ve received from Georgia Watch are as follows. For every dollar that is collected as “financing costs” recovery…

    25 cents goes to paying the interest
    50 cents goes to Georgia Power as profit
    25 cents goes to taxes.

    Furthermore, I just received a document yesterday that apparently they’re still having issues with the design. I’ll forward the document over to Charlie… perhaps he’d like to share as well. 🙂

      • Harry says:

        Is this really a show-stopper, or just an additional pesky roadblock put up by environmentally-driven DC bureaucrats?

    • Harry says:

      No question that Georgia Power is a hydra-headed snake that needs to be regulated, and their lobbyists need to be throttled. They need to be required to implement cogeneration where possible and expand their solar buyback program. Customers wanting to sell excess solar back into the grid will find this prominent notice on Georgia Power’s website “Note: This program is fully subscribed and is not accepting new customers into the program at this time.” That’s because Georgia Power lobbied for and were given a rigged buyback program where duped environmental-minded customers first have to pay extra for “green” electricity before Georgia Power is required to buy back any solar from customers. In other words, they don’t want the competition.

      • Jackster says:

        So the situation I love is … I was considering doing this, but you STILL have to pay an environmental fee if you do purchase green energy.

        you have to pay a preumium for energy generated by solar, then you have to pay a fee for the environmental impact of that energy.


      • saltycracker says:

        oops – was meant to ask DS

        Would he put any conditions on “free market” electricity allowed into Georgia ?
        Like from generation plants we’d never allow to be built in the state today ?

        • I’m pro-free market, but I’m also pro-property rights. That means whatever plants are built should not pollute the air that then flows onto other peoples’ property. If I buy a piece of land with certain clean air and water conditions, do others have the right to pollute the water or air that then flows onto my property? I think with any situation – whether it’s manufacturing or electricity generation – we have to take into account the various health costs such as asthma, cancer, and any other possible diseases likely to develop.

          I’ve had a variety of people asking me about climate change as well. My position is this. I don’t know whether climate change is real or not. I’m not a scientist. I’ve read plenty of articles covering both sides of the issue. I do know that no matter whether it is real or if it isn’t – we only have one Earth. We need to take care of it. You can call me an environmentalist whack job for believing that, but I liken it to taking care of the house you live in. Do you wash your clothes when they’re dirty? Do you vacuum / mop the floors? Is there a filter in your HVAC unit to clean the air? Same premise.

          • saltycracker says:

            Agree, I’m pro-free market AND a contributor to many nature related causes, particularly state parks..

            Just saying we have a heck of a time defining our terms to get to a livable community, not a 100% dust/dirt/particle, bacteria, germ free environment achieved at an astounding cost. Betcha most of us don’t even use state of the art filtering devices available for our HVAC or water.

            I bought into a save our turtles campaign years ago, nests increased dramatically then the bar was raised really high. The hard core moved in to essentially fight human activity within a 1,000 ft. of the beach. They did get some hefty fines for lights approved !

            If we can only ban those pesky chickens to AG zoning 🙂

  7. benevolus says:

    So how much is it going to cost to store/dispose of the nuclear waste? We don’t even know how we would do it it let alone how much it costs. Shouldn’t that be part of the cost? Any other company that has hazardous waste has to consider disposal as a cost if doing business.

  8. IndyInjun says:

    From a cost control perspective, that bill was truly horrendous, for it guaranteed an 11 or 11.5% return on the two new units apart from other operations. You can bet your bottom dollar that this will cause cost-shifting into the new units away from existing ones and current operations. I would need a pretty sizable audit staff to prevent that from happening. How many folks are on the project monitor’s staff? Remembering the ancient history there was an accounting scandal and charges of fraud surrounding the accounting for spare parts for Units 1 and 2 which prompted a large team of IRS agents to descend upon Southern Company offices and threaten to padlock the doors until there was more cooperation with the investigation. Southern later paid $20 or $30 million to settle.

    • You mean things like “gift for Danielle”? Thankfully the website for a previous contender for the Public Service Commission is still up and has archives of AJC articles from 2006 so I don’t have to find some other sort of way to dig through the archives…

      Essentially, there’s an environmental cleanup rider that AGL was allowed to pass through all costs related to an environmental cleanup they were doing. All sorts of things got billed to this rider that had absolutely nothing to do with environmental cleanup. Apartment cleaning, quail hunting trips, beer and wine… yep, sounds like environmental cleanup to me. I’m sure Georgia Power would never do those sorts of things though.

  9. Harry says:

    This “construction error” uncovered by the nuke regulators…is this just a ruse by the environmentalists in the Obama administration to slow down the nuclear industry, or is it really a serious construction failure on the part of Southern Company? I would have thought Southern Company has competent people on staff who would be in contact with the regulators during every step of the design and construction process. In like manner I would have thought regulatory inspectors would be on hand watching the design and construction. How could there be such a problem? Something doesn’t compute.

    • I’ve read a good bit on this and it sounds to me like one of two things happened. One is that Southern Company’s contractors aren’t all that good at following the designs that have been approved under the license to build the reactors. Another possibility is that construction began before the license was issued:

      “Coming almost exactly two years after the Obama administration granted the project $8.33 billion in federal loan guarantees, the NRC’s OK for the project did not signal a groundbreaking at Vogtle. Thanks to a redefinition of what constitutes construction, drafted under a former NRC commissioner who now works for the nuclear industry, Southern started building on the site long before the AP1000 reactor design was finally approved by the NRC last December. And foundations were poured into the Georgia earth before environmental impact surveys were even required to be filed. So, Thursday’s move did not actually start construction, but it did start the roulette wheel turning on a massive financial gamble where Southern Company is pretty much assured of winning, and US taxpayers and Georgia utility customers are guaranteed to lose.”

      • Harry says:

        The article from has an extreme environmentalist bias, but the one dated June 14, from the Augusta Chronicle, has some attached comments which indicated that the general contractor, Shaw, shares part of the blame with Southern Company and the NRC, and it’s part of a long-standing pattern. If so, the ratepayers should insist they be sued out of existence.

        • Yes, you have to take bias into account when reading articles (no matter the source), but you also have to consider whether the bias affects the facts of the article. If indeed they started building before the license was approved, does it matter who reports it?

          • Harry says:

            OK, going back to my original comment, how could such process errors be possible or be allowed to happen? Something doesn’t compute. There are several possible explanations and none of them are nice to contemplate.

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