The Georgia Public Service Commission staff and Georgia Power have reached an accord in the commission-directed review of the construction costs of Plant Vogtle .
According to a PSC news release, the proposed agreement means customers over the next four years will see a reduction of about $325 million in rates toward the construction of units 3 and 4 at Plant Vogtle.
The final decision is up to the full commission, which could approve, reject or modify the agreement. The commission intends to conduct hearings on the agreement to give all parties an opportunity to comment. The commission is expected to schedule a hearing before taking any further action on the settlement, according to the release.
The commission directed staff and Georgia Power through a Feb. 5 order to review the reasonableness of all costs incurred in the project through Dec. 31, 2015, and whether the capital cost forecast should be adjusted. If approved by the commission, the capital cost forecast of Georgia Power's share of the plant would be adjusted to $5.68 billion, including a $240 million contingency. State law provides a process for making periodic adjustments in the forecast when justified.
Under the terms of this settlement, staff and Georgia Power agreed that no costs incurred through 2015 were imprudent and that the recent settlement reached between the plant owners, including Georgia Power, and contractors on the project is reasonable and prudent, the release stated.
Current customers will see a reduction of about $325 million in rates over the next four years as a result of the agreed upon reductions in Georgia Power's allowed return on equity associated with its Nuclear Construction Cost Recovery tariff and deferring the cash recovery of certain other related financing costs.
The effect of reducing the allowed ROE on project financing costs reduces shareholder earnings by about $115 million over the same period. If the project is not in commercial operation by Dec. 31, 2020, additional reductions in ROE are provided for in the settlement, according to the release.
"Current Georgia Power ratepayers have paid $1.8 billion in financing costs for Plant Vogtle thus far," said Tom Bond, the commission's director of utilities. "We felt it was appropriate that these current customers get the lion's share of any benefits from the settlement and that shareholders should also contribute in a meaningful way."
Plant Vogtle is a nuclear power electric generating plant near Waynesboro. When fully operational, the two units now under construction will produce 2,200 megawatts of electricity, enough to power about 500,000 homes. The two existing units have been in commercial operation since 1987 and 1989.
The PSC certified Georgia Power's share of the construction cost of Vogtle Units 3 and 4 on March 17, 2009, at $6.114 billion. Georgia Power owns 45.7 percent of Plant Vogtle with its partners, Oglethorpe Power Corp., the Municipal Electric Authority of Georgia and the City of Dalton Utilities.