ATLANTA -- Georgia Power customers will have to wait to see if they'll be sharing the risk of construction costs overruns with the company's investors for two nuclear reactors at Plant Vogtle near Augusta after the Public Service Commission today postponed its decision.
The five commissioners unanimously supported scheduling a hearing at some future date that will allow experts to testify about the company's assertion that industry accounting guidelines limit the PSC's legal options.
At issue is a proposal by the PSC staff that the company not be allowed to make the same profit on construction costs that exceed by more than $300 million the $6.4 billion budget for the reactors. The commission already has authority to completely disallow charging customers for any unnecessary expenses.
The company argues that since Georgia law requires customers to pay all legitimate expenses, that includes financing costs. Having adequate profits to entice investors to use their money in financing the project is just as much a construction cost as the actual concrete and steel and therefore must be passed on to electricity customers, according to the company.
Commission Chairman Stan Wise recommended postponing Tuesday's scheduled vote on the staff's risk-sharing recommendation.
"Clearly, there is no urgency for us to act because we are on time and on budget," he said.
The commission has hired a consultant -- at Georgia Power's expense -- to stay on the construction site and monitor expenses. Also, the company submits monthly reports which the commission approves every six months. The first three of those semi-annual approvals have been granted, and the next is up for consideration this summer.
Commissioner Tim Echols voted with his colleagues on the delay and hearing but not before sounding skeptical about the benefits.
"The company seems to have made it very clear that they are not interested in negotiating," he said.
Since February, Georgia Power lawyers and members of the commission staff have been in talks about how to design a risk-sharing plan. The company never presented a proposal, instead taking a stance opposed to any risk sharing based on actual costs.
During a committee meeting last week, Georgia Power attorney Kevin Greene told the commissioners, "We just couldn't get there because we continue to maintain that a properly structured incentive plan should be directed toward the conduct of the company, not simply the results."