Getting a big nippy out, isn’t it?
Winter’s approach makes me thankful to live in a state where I can warm my home with reliable and affordable electricity. If you hail from a place where winters are colder and electric rates are higher – and I’m talking to all you Steelers and Ravens fans out there – you probably appreciate Peach State power prices as well.
According to federal energy statistics, Georgia’s 4.2 million electric customers in 2016 paid 11.50 cents per kilowatt hour for electricity – almost a full penny less than the average American.
I consider that somewhat amazing given Georgia’s sweltering summers and swelling population (it was America’s seventh fastest-growing state last year).
But can the state’s electric utilities deliver the same bang for the buck in 20 or 30 years when there are millions more people living here?
Hardly anyone thinks about that. But it is a major concern to the Consumer Energy Alliance, one of the advocacy groups that last month encouraged state regulators to allow Georgia Power and its partners to complete the controversial Plant Vogtle 3 and 4 project near Waynesboro.
“People are moving to Georgia – they are going to need energy,” Brydon Ross, the group’s Southeast director said in a phone interview on the eve of the Georgia Public Service Commission hearings.
Those meetings, which start back up Dec. 11, will determine whether the state-regulated utility and its newly hired contractor, Bechtel Corp., can finish the project that has gone billions over budget and years behind schedule under management of Toshiba’s now-bankrupt Westinghouse Electric Co.
The PSC is expected to make a decision in February. The decision also will affect Vogtle co-owners Oglethorpe Power, MEAG Power and the city of Dalton, Ga., which are helping finance the 5,500-employee construction project.
Outside the usual anti-nuclear hysteria, the new reactors are a sticky subject primarily because Georgia Power’s 2.5 million ratepayers have paid an average of about $100 a year in nuclear “cost recovery fees” since 2011 to help build them. The power plants were supposed to have come online this year at a cost of $14 billion.
The latest projections say the project won’t be operational until 2022, and could cost as much as $25 billion.
A 2009 state law has enabled Georgia Power to collect about $2 billion in up-front fees during the past several years. If the company is allowed to finish the roughly half-complete reactors, it will surely collect billions more in the coming years.
A tough pill for ratepayers to swallow, no doubt. But Ross’ organization says pulling the plug on Vogtle’s expansion will cost consumers much more over the long haul.
It’s a fact that nuclear plants, once built, generate electricity much less expensively and cleanly than natural gas plants and coal plants. Not even heavily subsidized solar and wind farms can top nuclear. Only hydroelectric is cheaper, but nobody wants to dam any more rivers.
“We’re not just looking at what today’s energy prices are, but what about 2040 or 2050?” said Ross, whose members include energy-intensive businesses such as manufacturers.
Ross said the alliance supports renewables, but said those sources simply can’t generate the “always on” baseload power required to keep Georgia’s commercial and industrial operations humming along 24-7.
Replacing just one Vogtle reactor with wind turbines would require a 100,000 acres of windmills, Ross said. That’s an area roughly half the size of Columbia County, in case you’re wondering.
“If (land use and air quality) are concerns that people have, then we’ve got to build more nuclear,” Ross said.
According to the U.S. Energy Information Administration, Vogtle and Georgia’s other nuclear power plant, Plant Hatch near Baxley, Ga., generated 26 percent of state’s electricity in 2016.
The agency puts Georgia’s 2015 per-capita energy expenditure at $3,273, which is $239 below the national average. Not bad for a state that that ranks No. 8 in energy consumption.
Vogtle’s current woes aside, nuclear power obviously has been a good thing for Georgia consumers.
POWER TO THE PEOPLE: Anyone who follows this column knows I’m pro-nuke.
I’m not an expert on anything (just ask my wife) but I know more about nuclear power than the average person, having worked a temp job in communications at Vogtle years ago for Georgia Power’s corporate parent, Southern Company.
Let me be clear: I believe pulling the plug on Vogtle would be a major error. But don’t mistake my support for the project as absolution for the managerial faux pas of the utility and its contractors.
Somebody must pay for this. And the finger shouldn’t be pointed at the state-regulated monopoly’s ratepayers – they did nothing wrong.
It was Southern Co. that took a free-market risk (and, ahem, federally-backed loan guarantees) to build America’s first new reactors in 30 years. Those shareholders and executives should face the consequences for the project going awry.
I find myself nodding in agreement at what Atlanta Tea Party co-found Debbie Dooley told state regulators: “I’m not anti-nuclear, but it’s wrong for ratepayers to bear this burden. If shareholders had to pay the burden, this never would have been approved.”
One could make a case shareholders of the Atlanta-based Fortune 500 company, which has 9 million customers across four states, have yet to feel the shock.
Southern Co.’s latest quarterly report shows a not-too-shabby net profit margin of 17.4 percent, and its annual average shareholder dividend has been a handsome $2.32 per share.
One would think Southern’s problems at Vogtle (and at the $7.5 billion Kemper “clean coal” plant in Mississippi) would cause the company to downshift. Instead, it is plowing ahead in talks to purchase the state-owned Santee Cooper from South Carolina. Santee Cooper, along with SCANA (owner of South Carolina Electric &Gas) canceled its Westinghouse-run V.C. Summer reactor project in July.
Southern Co.’s leaders certainly haven’t paid for the mistakes. CEO Tom Fanning last year got a $2.7 million bonus on top of his $1.3 million salary and saw his total compensation package increase by nearly 34 percent to $15.8 million. Executive Vice President Art Beattie got a 37 percent compensation boost to $5.4 million. Georgia Power President Paul Bowers ended up with $5.8 million, a 36 percent hike.
I would say Southern’s executive pay has become “decoupled from performance” but a group of public pension funds already said it in an open letter to shareholders this spring.
If Vogtle’s 3 and 4 reactors are finished – and I believe they will be – they will become profit factories for the company for decades, just like units 1 and 2, which are the most cost-efficient baseload plants in Southern Co.’s entire 46,000-megawatt portfolio.
Georgia Power ratepayers – everyone from the largest industries to the one in five Georgians below the poverty line – eventually will benefit from 3 and 4’s safe, reliable, low-cost and emission-free electricity. But right now, all they see is a surcharge from a company that seems oblivious to multibillion-dollar mistakes.
The people are upset and they want redress. If the PSC’s elected commissioners can’t remedy the situation equitably, they run the risk of having their own power cut off.
MORE ON NUKES: Due east of the sprawling Vogtle facility, just across the South Carolina border, is that sprawling Department of Energy installation we all know and (sort of) love: the Savannah River Site.
The good news is that the site’s Mixed Oxide Fuel Fabrication Facility will get a boost from the $700 billion military budget Congress approved last month. The bad news is that the $340 million MOX earmark is basically the same budget the project received under the Obama administration, which repeatedly sought to terminate the 600,000-square-foot complex designed to convert weapons-grade plutonium from U.S. and Russian military stockpiles into nuclear power plant fuel.
Work will continue at the 1,000-employee jobsite, but only at Obama-era “cold standby” levels designed to starve the mostly-finished project to death so administration acolytes could pursue an allegedly less expensive disposition method called “downblending.”
Part of the MOX morass is that the contractor, CB&I Areva MOX Services, made itself an easy target by consistently going over budget and missing deadlines. But the overarching problem is the Energy Department’s whipsaw spend-and-starve approach toward funding multibillion-dollar projects (see Mountain, Yucca) and the nonsensical manner in which it classifies and handles defense-related nuclear waste.
The Energy Communities Alliance, a national coalition of local governments affected by DOE projects, says the federal government could “conservatively” cut $40 billion in disposal costs by classifying nuclear waste by its radiologic risk instead of its origin. The alliance chairman, Aiken County Councilman Chuck Smith, testified in September to a House Oversight subcommittee that the DOE could easily streamline operations and better clean up its sites with simple policy changes.
“I can hold two wastes from two different sites in each hand,” Smith said. “A scientist will tell me it is the same material, but since its origin is different, current U.S. policy says it must be treated differently and one more expensively. Only the U.S. classifies nuclear waste this way.”
So perhaps the best part of the $700 billion defense bill President Trump is expected to sign this month is the language that directs Energy Secretary Rick Perry to conduct a cost-benefit analysis of reclassifying non high-level defense-related nuclear waste by Feb. 1.
Maybe some of that $40 billion in savings could someday help finish the MOX plant once and for all?
APPETITE FOR RECONSTRUCTION: A slightly less ambitious construction project, but one whose completion date is actually in sight, is the total makeover at Honda Cars of Aiken on U.S. Highway 1 in Warrenville, S.C.
The $2.5 million project, overseen by Allen-Batchelor Construction, will essentially rebuild the 16,000-square-foot dealership that opened in 1998.
“It’s a total renovation,” said Mike Whisenant, general manager of the Stokes-Hodges Auto Group-owned dealership. “It’s a front-to-back remodel.”
Work is expected to be finished by next October. Whisenant said the additional square-footage will allow the dealership to expand its customer lounge, relocate its back-office staff to a second floor and create three quick-lube bays in the service department for customers in need of a fast oil change.
“Everything is going to be a lot more customer-friendly,” Whisenant said.
WALTON WAY WORK: Things are popping in the medical district.
Hiral Enterprises, the local operator of the Super Express convenience store chain, has filed plans with Richmond County to develop nearly 7,000-square-feet of retail space at 1632 Walton Way, a property it purchased earlier this year for $435,000.
The tract, which is next door to the Dunkin’ Donuts/A Town Wings eatery, is directly across the street from the new Burger King under construction at 1633 Walton Way, a parcel formerly occupied by the Walton Way Wines &Spirits liquor store.
And next door to the Burger King, on a tract formerly occupied by Checkers, will soon be a Waffle House, which has been trying to open in the medical district for years, said Dennis Trotter, a principal at Jordan Trotter Commercial Real Estate, which brokered the land deal.
“I don’t have any doubt that they will do well down there,” Trotter said.
The Checkers didn’t go away, by the way. It just moved a block up the road to 1720 Walton Way a few years ago.
MAKE IT MARCO’S: The former Waffle House on Edgefield Road in North Augusta, near the Interstate 20 Exit 5 interchange, is getting redeveloped into a Marco’s Pizza.
“We’re excited to be in this market” said Woody Johnson, general partner of Pizza Guys LLC, the local franchise owner.
The sale of the half-acre parcel, brokered by Presley Realty, is just outside the new 300-acre Sweetwater Commons neighborhood, which includes 200 cottages-style rental units and 115 acres of wooded conservation area. The Marco’s will join other recent commercial developments in the Exit 5 area, such as the Holiday Inn Express hotel, a Dairy Queen restaurant and a Verizon Wireless store, as well as several under construction, including a Dollar Tree store, AT&T outlet and a Sprint Foods convenience store/market.
“We continue to be proud to be a part of the growth in this corridor” broker Joel Presley said.
POP QUIZ: So what’s better for local retailers: Black Friday or Small Business Saturday?
If you said the Saturday after Thanksgiving – the day specifically marketed for shopping at locally owned small businesses – then you would be, as John McLaughlin would say…wrong!
At least, according to an analysis of credit and debit card transactions at 2,800 local retailers in Georgia by Womply, a software firm for small- and mid-sized merchants.
The company’s number crunching from the 2016 holiday season showed small retailers saw 182 percent of their normal daily revenue on Black Friday, compared to 128 percent on Small Business Saturday. Womply’s data shows the second biggest revenue day for Georgia’s locally-owned merchants was Dec. 23, with stores reporting 146 percent of average daily revenue.
“This analysis suggests that the consumers are drawn to the rush of Black Friday and then tend to procrastinate shopping until the last minute,” Dan Lalli, a spokesman for San Francisco-based company said. “Local retailers in Georgia can use this information to plan their promotions and staffing this holiday season.”
Reach Damon Cline at (706) 823-3352 or email@example.com.