ATLANTA – Any money spent on the construction of two nuclear reactors at Plant Vogtle beyond the $6.1 billion originally approved would not be eligible for Georgia Power to earn a profit on under legislation introduced Thursday.
Rep. Jeff Chapman, R-Brunswick, said he has no objection to nuclear power, only to cost overruns, which he describes as a breach of the company’s contract.
“If they go over budget, then they broke the relationship. They changed what they said they could do,” he said.
As a regulated monopoly, Georgia Power must get approval from the Public Service Commission for its charges to customers. The commission bases those rates on a target return on investment, currently 11.15 percent, that will entice investors to lend the company money for expansion while holding electricity costs low enough to appeal to employers looking to move to the state.
The commission also approves all the construction expenses on Plant Vogtle every six months to ensure they were prudently incurred.
“To date, the commission has conducted seven separate public hearings (it is about to perform its 8th) in which it has verified and approved each dollar spent, has received reports from its independent monitor Dr. Bill Jacobs, and continually assessed the economics of the project. In each case, Dr. Jacobs has testified that Georgia Power is managing the project well,” said Georgia Power spokesman Mark Williams.
The commission has already voted to reject the so-called risk sharing proposal Chapman is making. Commission staffers recommended it as a kind of middle ground between complete approval or complete rejection of construction expenses.
Chapman notes that safety-related changes or soaring prices for materials could push the total construction cost beyond what was budgeted. Those expenses might be prudently incurred while still adding to what electricity customers have to pay.
Does he worry that his proposal might scare away investors needed to finance the massive construction project?
“No, I’m not concerned about that,” he said. They would be repaid what they loaned the company but would simply run the risk of losing a profit.
Chapman, a former state senator who left the legislature in 2010 to mount an unsuccessful campaign for governor, said he hasn’t spoken to anyone from the company or the chairman of the House committee likely to consider the bill. He did send a letter Monday to Georgia Power President Paul Bowers but has gotten no response.