Up front costs for nuclear power plant approved by senate, local lawmakers weigh in
Published: February 12, 2009
Updated: February 13, 2009
Georgia Nuclear Energy Financing Act
Plant Financing & Construction Process:
Georgia Power Financing Bill Passes in the Senate (GA Senate)
Nuclear Energy Fact Sheet (GA Senate)
NRC Staff Finalizes Safety Evaluation for Vogtle Early Site Permit
Nuclear Regulatory Commisssion (NRC)
Status and Outlook - Vogtle Units 3 and 4
Construction Cost & Regulatory Process
Nuclear Energy:
Outside of a Nuclear Power Plant
Pros and Cons of Nuclear Power Plants
Your power bills may be going up by 2011, and not for the electricity you would be using then.
The Georgia Senate Wednesday approved a bill to allow Georgia Power to start charging for the interest to build two nuclear power plants that would go on line by 2017. State Senator Eric Johnson (republican of Savannah) says in the long run, paying sooner rather than later would actually save consumers money. “This allows Georgia Power to save interest by beginning to slowly ramp up the cost of the plant into their bills,“ Johnson tells me. “This will lower the cost of the plant overall.“
The Senate bill would allow Georgia Power to increase bills by 1.3 percent beginning in 2011. This would add about $1.30 per month to the bills of most customers (who use 1,000 kilowatts of power.) By 2017, bills would have increased up to 9 percent or about nine dollars per month.
Johnson says the up front money will allow the utility to pay interest directly. “So they won’t be borrowing interest as well as the money to construct the plant,“ he says.
Georgia Power says it will ultimately save financing costs by $300 million, a direct benefit to customers.
Traditionally, many power plants are built and put on line and then customers are charged. But supporters of the bill say that nuclear power plants are so expensive to build, that phasing in the cost and avoiding large interest costs makes sense.
“Most power plants take one or two or three years to build and cost a fraction of what this project does,“ says state senator Don Balfour (republican of Snellville), who sponsored the bill. “This will cost Georgia Power about 6.4 billion dollars. The interest alone may be close to 2 billion so it just makes sense to try and save as much of that as possible for the customers.“
Oscar Harper, Georgia Power’s vice president of nuclear development tells me that the utility is actually in partnership with three other public entities in this project - the Municipal Electric Authority of Georgia (MEAG), Oglethorpe Power (which serves a number of electric cooperatives in the state) and Dalton Utilities, which serves the city of Dalton.
Harper says two new nuclear units are being constructed at Plant Vogtle near Augusta. He says Georgia Power’s ownership in the project is a little over 45 percent and that when completed, Georgia Power will receive 45 to 50 percent of all the new electricity generated. “This bill allows us to be collecting money as we start to build the plant, and to avoid compounding the interest,“ he says.
Harper also says that neighboring states, including Florida, have recognized the high costs of building a nuclear plant and allowed for some of the charges up front.
Senator Johnson says they have just tried to “give Georgia Power a level playing field.“ Johnson says the other partners in the project can and will charge their customers up front because they are municipal utilities. “we just want to equalize for Georgia consumers how the plant will be paid for.“
Johnson says if the plant is built and put on line and then Georgia Power begins to charge customers, that people will actually pay more. He says by then, interest charges will have accumulated and customers will be paying 12 dollars more per month instead of nine.
“I’m not a fan of this bill and it still has to be considered by the House,“ state representative Ron Stephens (republican of Savannah) says.
“Their argument was or course that cities and counties do this already with their water and sewer systems and their capital projects,“ says Stephens. “But the problem is that cities and counties are essentially owned by the very residents they represent. Georgia Power, the Southern Company, is in this for profit. And to place an additional burden, especially on a senior citizen up front for an upfront cost before they even start building the thing just isn’t reasonable.“
Supporters say provisions to help low income seniors have been put into the senate version
But Stephens says he believes the senate bill circumvents the Public Service Commission. “He’s right, it does,“ senator Balfour says. “In the next seven years, we could have two or three public service commissions. Members come and go. Why does Georgia Power want this? Because we need the stability to know what the rules will be to build that plant and so do their lenders.“
Balfour also disputed claims that this was one of the most heavily lobbied bills ever in the legislature. “I’ve been here for 18 years and I’d say it was about in the middle,“ he tells me.
Despite supporters pointing out the good that the bill would do for consumers, at this point representative Stephens isn’t convinced. “We’ve got a private company asking the rate payers in this state to pay forward for the expansion of their nuclear plant. I just don’t believe this particular piece of legislation is something we need to be dealing with. We’ve got a public service commission duly elected by this entire state and this issue ought to be in front of them,“ he says.
Georgia Power says the public service commission still has full jurisdiction over the decision on whether to build the plant and would oversee the the certification process. Georgia Power also says the commission would continue to have the “say” over any future rate increases.
The commission will take up the power plant issue in March.
“The only thing this bill does is deal with how the plant would be financed if the project is approved,“ says senator Johnson says.
Tonight at 6pm…
News 3’s JoAnn Merrigan will the very latest on this story and it’s impact on News 3 at 6pm!
What Do You Think?
Tell News 3 what your opinion is on the bill that was passed by the GA Senate as well as the whole project by placing a comment below…
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