ATLANTA — In a historic decision Thursday, the Georgia Public Service Commission unanimously voted to allow Georgia Power Co. and its partners to continue two new nuclear reactors at Plant Vogtle, a decision that affects billions of dollars, thousands of jobs and millions of customers.
The PSC, however, also penalized the company by $1.7 billion in what it can collect in the future from ratepayers.
Chairman Stan Wise said it was a “tough decision” but ultimately the right one to continue the project.
“History over time will show that we were correct,” he said.
Georgia Power wanted to continue the project but at an increased cost of $12.2 billion and a delay of roughly 29 months to 2021 and 2022, respectively, for the two reactors to come online, which it had asked the PSC to consider reasonable.
The cost of canceling would have been between $730 million and $760 million, with Georgia Power paying $330 million to $350 million. Georgia Power is a 45.7 percent owner in the project, and the total capital cost would be $19 billion. The financing cost for the other owners – Oglethorpe Power, MEAG Power and Dalton Utilities – is not publicly reported to the Public Service Commission.
Vice Chairman Tim Echols made the lengthy motion to approve the capital cost of the project at $7.3 billion, the company’s capital request minus a $1.7 billion payment that Georgia Power received through the former contractor on the project. That motion also reduced what the company can collect from ratepayers for the project beginning in 2021 that amounts to about $1.7 billion.
Georgia Power attorney Kevin Greene said the company and its partners had discussed the possibility that the approval would come with conditions and would accept that. Although Echols said he did not want to get into details about his interaction with Georgia Power over the new conditions, he added, “Ultimately, they were read in and gave feedback” on those restrictions.
The approval also assumes Congress would pass an extension of nuclear production tax credits that were stripped out of the tax reform bill, which amount to about $800 million, and the PSC can revisit its decision if that does not take place.
Wise said he has assurances from both of Georgia’s U.S. senators in addition to congressional leadership that it will be taken up in January.
Echols said that the first two reactors built at Vogtle were controversial and ran over budget and beyond schedule but were ultimately allowed to proceed, benefiting ratepayers, and that the same will hold true for the two new reactors.
“Georgians will look back and be as grateful for (this decision) as we are for the decision to complete (the first two),” he said.
PSC member Chuck Eaton called the first two reactors “the crown jewels” of the state’s energy production.
“I still believe nuclear needs to be part of a diversified mix,” he said. The two new reactors are the only ones under construction in the U.S.
Thursday’s vote was welcomed by Augusta Technical College, whose nuclear engineering technology program was created seven years ago to help supply workers to new reactors Vogtle 3 and 4 along with the existing units and the neighboring Savannah River Site, a nuclear-intensive Department of Energy installation.
Jim Price, the college’s dean of industrial and engineering technology, said moving forward on the new reactors reinforces the need for the two-year program, which enables graduates to obtain mechanical, electrical and pre-operator jobs at nuclear plants throughout the Southeast.
“It gives it better credibility,” Price said Thursday. “This is good for Georgia and good for the country.”
That is especially so for Burke County, where Vogtle is situated and which has seen large economic growth from the massive construction project. Jessica Hood, the executive director of the Development Authority of Burke County, called the decision “fantastic news” for the community and region.
“We are thankful that the thousands of workers at units 3 and 4 will not be impacted and will continue to be employed at the site,” she said.
In prepared remarks, Augusta Metro Chamber of Commerce President Sue Parr called Vogtle an “investment in the long-term energy security of our state and a dependable source of electricity for both the public and business.”
“Plant Vogtle is a critical part of Georgia’s energy mix and an important economic driver for our state and our region,” she said.
Many environmental groups had urged the PSC to cancel the project. Kurt Ebersbach, the senior attorney for the Southern Environmental Law Center, said the decision was a “foregone conclusion” before the vote was even taken.
As part of the approval, Georgia Power will be required to give customers a $25 credit for three months on their bills as a “refund” for what they have paid so far for the new reactors. Ebersbach called that a “token gesture.”
Georgia Power will also be required to create a 5-megawatt community solar project on the Vogtle site, which Echols wanted so that people arriving at the site see solar before they see the reactors.
The project had been plagued by delays – the reactors were originally supposed to be online in 2016 and 2017 – and the cost had ballooned from the original $6.1 billion budget. About $4.3 billion already had been spent on the project for construction and capital costs with $2 billion in financing costs. Tom Newsome, of the PSC staff, said it is about 40 percent complete.
The original contractor, Westinghouse, declared bankruptcy in March after its parent company, Toshiba, wrote off more than $6 billion in losses from its nuclear business. Westinghouse was also responsible for the new reactor project at the V.C. Summer site in South Carolina, which was abandoned by its owners in July because of the high cost of completing it. Georgia Power insisted the two projects are very different.
The utility and Public Service Commission staff members presented very different projections of whether continuing the project would make sense for ratepayers under Georgia Power’s proposal.
Georgia Power contended that completing the reactors would make more economic sense than canceling and relying on an alternative, such as a natural gas plant, while staffers estimated the project would be “uneconomic” by $1.6 billion. The staff and Georgia Power estimates on the future price of natural gas were about $1 billion apart.
Commission staff also argued that the delays actually benefited Georgia Power by increasing its profits by $5.2 billion and increasing the cost to ratepayers by $14 billion over the 12 years of construction and 60-year life of the plant. The reductions the PSC made Thursday to future payments from ratepayers would seemingly reduce that $14 billion to $12.3 billion.
The PSC also approved $542 million that had been spent at the site this year up to June 30, even though commission staffers recommended only $44 million be approved, because Georgia Power paid contractors and liens after Westinghouse declared bankruptcy and without that “it is almost certain that the project would have come to a stop,” Echols said.
Georgia Power argued that the Vogtle reactors’ importance to the nuclear industry in the country should be taken under consideration given that they are the only ones under construction.
About 6,000 workers have been employed during construction, with an estimated payroll of $115 million a year, and 800 permanent jobs are expected to be created upon the project’s completion.
The International Brotherhood of Electrical Workers Local 1579 office, which serves as the central gathering place for the metro area’s 17 trade unions, which employ the bulk of the 6,000 workers at the Vogtle construction site, welcomed the decision.
“I think they’re all breathing a sigh of relief,” Will Salters, the local business manager, said of his colleagues. “They’re like the rest of us; they’ve all got mortgages and cars. If the vote had gone the other way, they wouldn’t have jobs.”
U.S. Rep. Rick Allen, whose 12th Congressional District encompasses the Vogtle site, said in a statement Thursday that he was pleased to hear the project will continue.
“Employing nearly 6,000 people in my district and continuing our dominance in the global nuclear industry, the importance of the Plant Vogtle project cannot be overstated,” he said in prepared remarks. “I believe this project is vital to our district, our state and America’s nuclear energy future.”
He said it is still critical that Congress modify the Nuclear Production Tax Credit to extend the 2020 sunset date, which is expected to be discussed early next year.
Staff writer Damon Cline contributed to this article.
Reach Tom Corwin at (706) 823-3213 or email@example.com.