Time to flip the ‘off’ switch for Plant Vogtle
This week, Georgia’s Public Service Commission will either deliver state consumers a welcome holiday gift or play the Grinch and stick them with a heftier bill to pay.
The PSC’s five members are scheduled to decide at their meeting Thursday how to proceed with Georgia Power’s effort to complete construction of its new nuclear reactors at Plant Vogtle on the Savannah River near Augusta. The project is already years behind schedule and billions over budget, much of that bill being footed by rate payers. Since work began in 2009, it already has cost nearly $6 billion.
The reactors were originally scheduled to be completed this year at a cost of about $4.4 billion. Now to finish the work, Georgia Power estimates it needs three to four more years and another $12.2 billion, both likely optimistic goals, and wants to continue passing much of that cost along to its customers. The project’s final cost could hit $25 billion.
It’s up the PSC to decide if it can. Already, the agency’s analysts prepared a scathing report on Plant Vogtle that blamed Georgia Power for its mishandling and poor planning and oversight of the mess, and recommend it be scrapped.
The merits or detriments of nuclear power spark a worthwhile debate. Those who oppose it cite the costs, waste material and dangers such plants impose. Advocates for nukes say it’s cleaner, more environmentally friendly than fossil fuels and designed to be safe. Though major nuclear accidents have been rare, a few have resulted in serious loss of life and ecological horrors, such as Chernobyl in the old Soviet Union in 1986 and Fukishama in Japan in 2011. All of those factors need to be considered in expanding nuclear power use.
As with most forms of energy, there’s a trade-off. Coal and oil pollute the air and likely affect the climate and alternatives such as solar, wind, natural gas and hydroelectric all have their advocates and detractors.
That debate aside, the biggest question here is how much more should Georgia consumers be expected to fork over for Georgia Power’s boondoggle?
That alone would justify a skeptical approach to approval, but factor this in as well: Georgia Power’s deal for the plant construction guarantees it a profit from a percentage of the project’s total cost, meaning it takes in more money the longer it takes to complete. That’s a little like hiring a contractor to build your house and having his profit margin go up for each delay or additional expense.
The PSC’s analysts’ report stated that Georgia Power failed to manage the reactor construction in a “reasonable manner … completion of the project is no longer economic given the additional costs and schedule delays.” Their estimate of the cost to complete the work is $8.3 billion, well below what Georgia Power is seeking.
There are some problems beyond Georgia Power’s control. The manufacturer of the reactors being installed, Westinghouse, declared bankruptcy in March, halting all construction involving its products. That move led to a similar project in South Carolina to be abandoned. Georgia Power did, however, get $3.2 billion back in a settlement with Westinghouse’s parent company, Toshiba.
Now comes news that the tax reform plan before Congress could eliminate a tax credit for nuclear energy production that would have boosted the project’s bottom line by some $800 million.
