Georgia Nuclear Plant to Take Longer, Cost More
March 1, 2013
The danger for the Georgia Power is that the potential for energy conservation is so great, and growing by the day, that large electrical customers may decide its cheaper to radically cut electricity use, than pay increased rates, when and if this comes online. There are also expanding options for large customers, manufacturers, schools, hospitals, to produce their own power using, for instance, small, efficient gas turbines, and combined heat and power units.
In addition, by the time this is finished, technological advances in photovoltaic solar will be creating even more options for large consumers, those with large flat roofs, parking lots, or tracts of land, to produce their own energy.
As large players opt out, rates have to rise further, and more pressure is placed on smaller residential users. They begin to use less to the degree they can. Lawyers get involved.
We’ve seen utilities go into this death spiral before, and I suspect that is what we will see play out in Georgia.
Georgia Power’s Plant Vogtle nuclear expansion project will take about 19 months longer to complete than originally expected and cost about $740 million more than originally thought, the company said Thursday.
Georgia Power said its share of the estimated $14 billion project will rise to $6.85 billion, up from $6.11 billion, because of increased capital costs and additional financing costs. Customers, who have been paying the financing costs since 2011, now will pay them for a longer period of time.
Customers started paying Vogtle’s financing costs as part of a controversial nuclear fee approved by state lawmakers. The fee started at $3.88 in 2011, then rose to $4.26 the following year. Now, the fee has increased to $5.11 and will continue to climb each year until the reactors start producing electricity, which is now scheduled for the end of 2017 and 2018. At that point, the financing costs will be replaced by operating and capital, or construction, costs.
“It’s clear that some real damage could be done on the pocketbooks of ratepayers,” said Elena Parent, executive director of Georgia Watch, a consumer rights group.
Georgia Power owns 45.7 percent of Vogtle, and a group of municipal and electric utilities owns the rest. Even with the cost increases, Georgia Power executives say the project’s total cost is “still around $14 billion.”
More increases could be on the way. Delays have triggered lawsuits between the project’s main contractors and the group of utilities building Vogtle. Georgia Power’s liability in those suits totals $425 million, but the utility maintains it is not responsible for the delays or costs associated with them.
Because Georgia Power is a regulated monopoly, the utility can pass its costs onto consumers.