Tea Party Turns on Georgia Nuke, Pushes Solar
June 4, 2013
Man bites Dog.
I guess somebody in the Tea Party reads this blog.
AP via Salon:
ATLANTA (AP) — Tea party activists in Georgia are taking what appears to be a rare stand on energy, challenging a power utility’s reluctance to increase solar energy and questioning the ballooning costs of building a nuclear power plant.
The Atlanta Tea Party’s action is relatively unusual among loosely linked tea party organizations nationally.
Other tea party groups have condemned the adoption of “smart” utility meters that transmit information about customer usage, due to concerns that they would intrude on customers’ privacy. Or they have broadly backed less reliance on foreign energy.
But relatively few have endorsed so specific an energy platform in their own backyards, much less promised to campaign on it.
“It certainly isn’t anything personal, but one of our core values is promoting the free-market system,” said Julianne Thompson, a co-founder of the Atlanta Tea Party.
The electricity market in Georgia is not a free market. State law gives electric utilities, including Georgia Power, exclusive rights to serve customers in designated areas of the state. Most customers cannot choose their provider.
While monopolies have more power to charge higher prices than firms in competitive markets, there are times when it makes sense to allow them if their prices are regulated.
It would be more expensive to build more than one system of electric wires or natural gas pipelines to deliver power and fuel to every home in a state. Customers are better off if just one system is built and maintained, as long as the company that runs the system is prohibited by regulators from using its monopoly power to drive up prices.
In many states, including Texas and most of the Northeast, power delivery is regulated, but customers can choose who provides their electricity. Customers in those states can choose from companies that provide such options as renewable power or a slate of pricing options, including fixed rates, rates that vary with market fluctuations, or rates that vary based on when during the day power is used.
Georgia Power makes a natural political foil for the tea party. A 2011 poll conducted by Yale University and George Mason University found that tea party members were far more likely than Democrats, Republicans or independents to distrust central authority and strongly opposed energy policies that raise costs, even if there are other benefits.
Yale University researcher Anthony Leiserowitz, who worked on the poll, said he was not surprised local tea party supporters might challenge a monopoly.
“That totally taps into that same sense that there are these big, institutional forces against which you’re a little guy and you need to rebel,” he said.
The tea party groups are also targeting Georgia Power over the rising cost to build two new nuclear reactors at Plant Vogtle. The utility’s share of the project was supposed to cost $6.1 billion, but Georgia Power is seeking permission to raise its budget to $6.85 billion – and cautioned that costs may still increase.
Dooley’s group is particularly peeved that Georgia lawmakers are allowing the utility to charge its customers for the project’s finance costs before it produces power. This year, tea party members supported legislation from Rep. Jeff Chapman, R-Brunswick, that would trim the utility’s profits if it goes over budget building the plant. Chapman’s bill did not pass, though it could be considered next year.
Georgia Power argues the plant makes economic sense in the long run. The utility says the nuclear plant will be immune to swings in natural gas prices and will not be affected by limits on carbon emissions if they are enacted in the years to come.
Dooley said she supports nuclear power but wants more accountability. Under state law, Georgia Power’s customers must pay for the nuclear plant unless regulators find its costs were unreasonable.
“They are guaranteed to make a profit on the cost overruns,” Dooley said. “What incentive is there to come in on budget, on time?”
The already bad news got still worse–not surprising for a project that is all but financially insulated from its own failure. As I previously wrote at MasterResource:
With a pending $8.6 billion federal loan guarantee, a cap on liability, production tax credits and pre-collection of profits this makes Georgia Power the nation’s biggest welfare queen.
Georgia Power’s latest report to state regulators indulges in self-praise, shifts blame for growing problems, and employs misleading analysis. The Company asks the GPSC to approve an additional $737 million in cost and add 15 months to the project’s schedule. Since Georgia Power has 45.7% ownership, the entire $14 billion project has additional cost of over $1.6 billion.
Still, Georgia Power sports an A+ rating credit rating. Why? Because regulators are expected to approve this and future cost overruns for automatic recovery. This would include adverse litigation judgements (see below).