Georgia Power could earn more money if it goes over-budget building two new nuclear reactors at Plant Vogtle near Augusta.
Because Georgia Power is a monopoly, it’s up to the state Public Service Commission to make sure its rates are fair to customers. And that the company can earn a decent profit.
Right now Georgia Power can earn up to 12 percent of what it charges customers. Plant Vogtle’s construction costs are included in that charge which means higher building expenditures could boost Georgia Power’s profit. Bobby Baker used to sit on the PSC.
"If the company goes over projected $6.1 billion budget than any amount of cost overuns will be added to the rate base if it’s considered prudent and reasonable. And it will impact the company’s earnings," says Baker.
A plan scrapped by the PSC last month would have lowered the company’s profit percentage as it went over budget.
Instead, the commission will rely on periodic reviews of the project’s construction and can recoup costs it deems unreasonable.
Georgia Power says that’s sufficient to ensure fairness to consumers and investors.
The elected five member Public Service Commission will vote on the settlement Tuesday.