Georgia Power

Georgia Power’s 2.25 million customers will see about a five dollar increase on their bills starting next month. The Public Service Commission gave the utility permission to raise rates in order to recover its fuel costs. Georgia Power said customers owed it nearly $700 million because it wasn’t collecting enough money to pay for the coal and natural gas that fire their power plants, so in a 4-1 vote the PSC granted a rate increase averaging about $5.59 a month. To ensure that doesn’t happen to that degree again, Commissioner Stan Wise says the PSC also gave the utility permission to raise rates higher without an initial review, if their fuel costs go higher than anticipated. "Ultimately those costs will be reviewed in the next fuel case by the commission, but the interim fuel recovery allows the company to recover those dollars currently so the balance does not become larger," says Commissioner Wise. Commissioner Bobby Baker voted against the interim fuel rider saying it allows the utility to avoid up-front scrutiny of their business operations. "IFR is an easy way to slip in an increase without raising the visibility or going through any review process, letting people know what’s happening. It will be done very quietly," says Commissioner Baker. If the rider is used, the PSC can review the company’s decision after customers have paid the money. Commissioner Wise says the rider saves ratepayers administrative costs.

Preliminary construction work at the site of a nuclear power plant expansion came to a temporary halt after a bomb threat Monday. The threat was phoned in to a subcontractor at Plant Vogtle in Waynesboro. Law enforcement officials say the site was not evacuated, but workers were moved to designated areas as a bomb squad searched offices, equipment and an area where gasoline is stored. The employees returned to work after the search turned up nothing. Sheriff's deputies say the threat did not involve the existing reactors. Preliminary site work has begun in anticipation of two new nuclear reactors at Plant Vogtle, whose majority owner is Georgia Power. The company is still awaiting approval from federal officials to build the reactors.

President Obama is expected to announce Tuesday that Southern Company will get the nation's first loan guarantees to build the country's first nuclear reactors in three decades. The guarantees would go toward the construction of two new reactors at Plant Vogtle in Waynesboro, covering project costs if Southern Company defaults, and makes it easier for the company to get loans. Georgia Power, a subsidiary of the Atlanta-based Southern Company, is a majority owner of Plant Vogtle. The company's share in the project costs and financing charges is about $6 billion. A controversial rate increase -- beginning several years before the reactors begin operation in 2016 and 2017 -- will help pay financing costs. Opponents, though, say the guarantees are an enormous risk to taxpayers. Huge cost overruns plagued the construction of the first two reactors at Vogtle. Other power companies experienced overruns as well. A press spokeswoman for Southern Company declined to comment on the guarantees today, saying executives there will wait until after Obama's announcement on Tuesday. The federal government has allocated $18.5 billion for guarantees for power companies seeking to build nuclear reactors. Obama is asking that Congress appropriate three times that amount for the next fiscal year.

A Georgia watchdog group is calling on the governor's consumer affairs chief to get involved in cases that could boost utility rates. Georgia Watch said Joseph Doyle has not intervened in a single rate case before the state’s Public Service Commission. Doyle was appointed in 2004. He was sent a letter yesterday highlighting cases of the group's concern like Georgia Power’s proposed rate increase case among others. Georgia Watch Executive Director Angela Speir Phelps says they could cost ratepayers billions of dollars. Doyle’s office did not immediately return a phone call seeking comment.

Robins Air Force Base in Warner Robins has signed a two year contract with Georgia Power to purchase renewable energy. The deal represents about 40 percent of the total green energy sold by the utility provider. The program includes power generated from solar, landfill methane, and biomass. Robins is mandated by the federal government to purchase five percent of what they consume from renewable sources. The base is the largest industrial complex in the state and employs 25,000 people.

The U.S. Department of Energy will soon announce the recipients of $18.5 billion in federal loan guarantees for construction of new nuclear reactors, and Southern Company apparently is a leading contender, according to industry watchers. Southern Nuclear Operating Company, a division of the Atlanta-based Southern Company, is currently seeking approval to build two new nuclear reactors at Plant Vogtle in Waynesboro. The company is well-positioned for the guarantees because of strong assets and community support for the reactors, says Michael McKenna, president of MWR Strategies, a consulting company that has also lobbied Congress on behalf of Southern. "I think Southern has proceeded along the course that they're going to get loan guarantees, and that's how they're thinking about their financing for the plant," says McKenna. "I think if they didn't get the loan guarantees, it would be difficult to re-work the financing in a way that makes sense." The guarantees would make it easier for Southern to get loans more easily and cheaply to pay for the reactors, and would also cover project costs for utility companies if they default. Industry analysts say the new Vogtle reactors could be the first approved by the federal government in decades. Opponents of the reactors, however, fear that the guarantees will place an enormous risk on taxpayers. "You're socializing the risks, but you're privatizing the profits, where the utility companies get to keep the profits from all the rates of return," says Stephen Smith, director of the Southern Alliance for Clean Energy. The state legislature in March approved a controversial increase on electricity rates to help pay for the plant expansion while work is in progress, instead of waiting until after the reactors are completed. Again, Georgia Power, a division of Southern Company that owns a majority share in Vogtle, argues the rate increase will save money, while environmental groups argue that ratepayers could be stuck with higher rates whether construction is completed or not. Huge cost overruns plagued construction of nuclear reactors in the 1970s and 80s. At Plant Vogtle, costs for the first two reactors skyrocketed from $660 million to $8.87 billion. Those problems, along with fears of a nuclear accident, brought reactor construction in the U.S. to a halt for decades. Preliminary site work on the site of the new reactors began this summer at Plant Vogtle, after the U.S. Nuclear Regulatory Commission approved a limited work authorization. Southern Company is still awaiting approval from the NRC to build and operate the new reactors. Stephanie Mueller, a spokeswoman for DOE, declined to comment on the loan guarantee applicants, or when recipients would be announced. People monitoring the industry, meanwhile, say they expect an announcement to come before the end of this week. A spokeswoman for Southern Nuclear Operating Company also declined to comment until after the DOE names the recipients.

The proposed construction of two new nuclear reactors at Plant Vogtle near Waynesboro could likely have cost overruns and possibly face delays, according to testimony released by the Georgia Public Service Commission. The group monitoring the progress of the new reactors is also being denied access to crucial information about the process, and Georgia Power is not revising economic evaluations based on a variety of factors that include a reduced demand for electricity and cheaper alternatives to nuclear energy, the document says. The testimony, dated December 2, comes from PSC staffers and an independent monitor assigned to review Vogtle in advance of a hearing scheduled for Wednesday, the second in a semi-annual review of the construction timeline and budget of the reactors. The PSC reviews are required by a state law written after construction of Plant Vogtle's first two reactors in the 1980s skyrocketed from a projected cost of $660 million to $8.87 billion. "This project should be subject to a higher level of scrutiny due to higher financial risk to the ratepayer," says William Jacobs, an engineering consultant who also serves as the independent monitor for the Vogtle project. Jacobs says his prediction of possible overruns is, in part, based on overages in the conversion of Georgia Power's Plant McDonough from a coal plant to one supplying gas. The amount of overage is redacted from the testimony. Jacobs also notes that design flaws with the reactor design could delay the project, including an issue with a shield building that is supposed to protect the reactor from severe weather and other catastrophic events, as well as preventing radiation from escaping the reactor and supporting an emergency cooling tank. Jacobs says that Westinghouse, the reactor manufacturer, has indicated it will submit design revisions to the U.S. Nuclear Regulatory Commission by January. But it's unclear how long it will take the NRC to approve them or how much the re-design will cost. Georgia Power has said the design issue will not delay construction of the reactors, although the NRC has said it is unsure how the issue will affect the licensing timeline. The testimony also says: *Georgia Power's latest economic data "falls short of being a reasonable job," according to Jacobs, who notes that a recent drop in natural gas prices has not been factored in as a cheaper energy alternative and that there is "a significant depressed demand for electricity in its service area." Georgia Power has said the reactors are necessary to meet an increasing demand for electricity as the population in Georgia grows. *Georgia Power has denied the PSC staff and Jacobs access to meetings they hold with Westinghouse and the NRC, preventing them from hearing crucial information that they need to effectively monitor the progress of the reactors. The company has said that releasing specific information about the plant amounts to revealing trade secrets, which could harm the process. The statements from the independent monitor and PSC staffers follows a controversial rate increase passed by the state legislature in March and signed by Republican Governor Sonny Perdue. The legislature's actions usurped the regulatory authority of the PSC, which had been slated to consider it. Georgia Power maintained the rate increase would save about $1.6 billion in financing costs. Opponents said it could stick customers with higher rates, even if plans for the reactors are abandoned. Georgia Power, whose share of the costs is more than $6 billion, hopes to begin construction in 2011 and have both reactors online by 2017. The NRC has authorized preliminary site work, which has already begun at Vogtle, but the agency still hasn't approved construction of the reactors. If approved by the NRC, they would be among the first built in the U.S. in 30 years.

A lawsuit over whether it's constitutional to let Georgia Power charge its customers up front to build two nuclear reactors at Plant Vogtle stalled in court Wednesday. The Southern Alliance for Clean Energy didn’t get a chance to argue its case in Fulton County Superior Court in downtown Atlanta because the judge disclosed he owns stock in the utility’s parent company and offered to recuse himself from the case. SACE’s lawyer Michael Carvalho accepted. “For purposes of good order, the judge did indicate he’s a shareholder in Southern Company, and we feel these matters will have significant impact on the shareholders of Southern Company," says Carvalho, "and we intend to go after the shareholders quite vehemently.” Carvalho says shareholders will be the ones profiting from Georgia Power's $6.4 billion project to expand Plant Vogtle. A new judge must now be assigned the case which could take weeks. SACE is suing Georgia Power, but also the Public Service Commission and the state for making customers pre-pay for the construction project and for exempting big businesses from the tab. Carvalho says it’s unfair and unconstitutional. Lawmakers passed a bill last session approving the controversial funding. Traditionally, customers pay for those projects after they’re completed.

There’s no doubt Atlanta has grown over the years and so has its demand for natural gas. Atlanta Gas Light’s Suzanne Sitherwood says to keep up, the company needs to lay bigger pipes around metro Atlanta. "We’ve had a lot of growth in the metro Atlanta area," says Sitherwood, "and we’ve added, in the last seven years, one million new homes, so we’re constantly trying to manage growth in and around Atlanta and that growth requires infrastructure." To build that infrastructure, the gas monopoly convinced its regulators the Public Service Commission to authorize a surcharge. Over a million AGL customers are now paying an extra $0.39, and the fee will increase to over a dollar over the next couple of years. PSC Chairman Doug Everett says he approved the surcharge because he wanted to make sure everyone gets gas even on the coldest days of winter. "We had letters from chambers of commerces, letters from county commissions supporting this because they needed additional pressure," says Everett. "The time to do this is now, not in the future when somebody’s gas is going out. You need to do it now." But charging customers now for future expansion didn’t sit well with Commissioner Robert Baker. His was the sole dissenting vote. "I don’t think it’s fair for customers" says Baker, "because essentially what you’re asking for are customers today to pay for assets or investments they may never use in their life time. They may move away to another state. They may pass away." And that is why the AARP is now suing the PSC and the gas company. It argues that it’s unfair to charge customers $400 million over the next 13 years through the surcharge. AARP lawyer John Coffman says it’s like paying for a house before it’s finished. "You might look at it as whether you have to perform a construction and then turn in your receipts for eview after the fact or whether you simply have someone’s credit card. Using someone else’s credit card as you go is not the best way to manage a project." Traditionally, Coffman says utilities had to put up all the money themselves, and then justify the costs to regulators like the PSC. Now with the surcharge, he says there’s little incentive for a company to come in on time and at cost. "There’s a trend particularly with large projects, large coal plants or large nuclear facilities," says Coffman. "Often the utility will convince the government to give them an ability to charge in advance for those investments, and consumers usually wind up paying much more." Earlier this year, Georgia Power won approval from state lawmakers to charge its customers in advance to build two new nuclear reactors at Plant Vogtle near Augusta. Similarly consumer groups called foul then. But PSC Chairman Doug Everett says charging upfront saves consumers money in the long run because the utilities save on financing. He says it’s just like funding public transportation. "You know, not only utilities do that every road and bridge you drive on has been doing that way for years," says Everett. "I mean it’s the way it’s always been financed." But the difference is, roads are built by the state; Atlanta Gas Light and Georgia Power are profit-driven monopolies. That’s why those businesses, the AARP argues, should finance big projects without help from ratepayers. The advocacy group hopes a judge will hear them out in court.

The Public Service Commission has asked Georgia Power to come up a with a solar only option for its Green Energy program. Currently, customers can purchase blocks of renewable energy but most of it comes from landfill gas, with up to ten percent coming from solar. The PSC wants the utility to present details to the commission like how much it would cost and its feasibility in 30 days. Georgia Power is a monopoly regulated by the elected body the Public Service Commission.