Human Behavior

There is definitely no logic to human behavior.

Ratepayers are sat upon

icon_nuclear_power.jpgIn an op-ed published by the Atlanta Journal-Constitution last week, state Sen. Don Balfour (R-Snellville) warned about the dangers of excessive spending and taxation during the recessionary times in which we live.

“Local government should do everything possible to avoid placing more hardship on its citizens,” wrote Balfour, who chairs the Senate Rules Committee. “Whether you call it a revenue enhancement, balancing budgets, or by any other euphemism, a tax increase still amounts to more financial strain on the taxpayer. People do not have the ability to pay more for government services right now.”

He added: “This is the bottom line: Government needs to control spending to balance their own budget and cannot rely on increasing taxes.”

This is sound, common-sense advice. Consumers who overspend can quickly find themselves deep in the hole of credit card debt, a hole that is difficult to dig your way out of. Once the federal government gets past its current surge of spending (expenditures that were necessary for President Barack Obama to deal with the economic crisis dumped on him by George W. Bush), it will have to start dealing seriously with the national debt.

Balfour’s problem, however, is that his legislative actions undermine his credibility as a critic of big spending and tax increases. It should be remembered that Balfour sponsored one of the most odious bills of this past legislative session, SB 31.

This was the bill that gives Georgia Power Co. a $1.6 billion revenue windfall by allowing the utility giant to start charging its ratepayers for a proposed nuclear power plant expansion at least six years before the facility has even been completed or started generating electricity. The “big spending” utility, thanks to the generosity of Balfour and his legislative colleagues, can start adding a $1.30 surcharge to monthly power bills in 2011 and increase that charge every year until it hits $9.10 a month in 2017.

As Balfour wrote in his AJC guest column: “A tax increase still amounts to more financial strain on the taxpayer. People do not have the ability to pay more for government services right now.”

Oh, really? Then how do you explain that your bill allows Georgia Power to effectively place a tax increase on each of its customers before the nuclear facility even goes into operation? This Georgia Power rate increase – which takes dollars out of a customer’s pocket as surely as a tax increase does – amounts to $15.60 a year in 2011 and increases to $109 annually by 2017. That is the year when the nuclear facility, if it can get federal approval, will finally be providing electricity to those same customers.

This is grossly unfair, especially when you consider that Georgia Power retained a well-dressed army of more than 70 lobbyists to push for passage of SB 31 (the bill was signed into law by Gov. Sonny Perdue, whose chief of staff was a longtime Georgia Power lobbyist).

It was obviously a good investment for the utility, since it can now pocket $1.6 billion from its customers – even if the nuclear facility is not approved by federal regulators or never goes into operation.

I must confess that I’m puzzled by the actions of Balfour, who touts himself as a conservative, free market advocate. I was always under the impression that in a free market, a company that decided to spend money on an expansion of its business did so with the understanding that its own money was at risk. If the expansion turned out to be a bad idea, the company lost the money it invested. If the expansion was successful, then the company and its shareholders would benefit from the increase in profits.

Balfour stood this principle completely on its head with SB 31. Georgia Power wanted to invest billions of dollars in a risky proposal to expand its nuclear generating facilities. With most other businesses, the executives would have had to weigh the alternatives and decide if they wanted to put the corporation’s money at risk. Thanks to Balfour and the other lawmakers, Georgia Power shifted many of the risks from its shareholders to its captive market of ratepayers – who can’t get electricity from anyone else.

With SB 31, the dice were loaded even more against the homeowners and small businesses who are least able to afford an increase in their electricity rates. As SB 31 was being marked up in committee, legislators amended it so that large business customers and industrial users would pay a smaller share of the nuclear plant costs than residential customers.

If you think that particular deal sucks, you’re not alone. But then, you can’t afford to hire 70 lobbyists to argue your case to the General Assembly.

Tags: Don Balfour , Georgia Power , lobbyists , nuclear power , rate increases

One Comment

  1. J.M. Prince
    Posted June 15, 2009 at 12:28 am | Permalink

    Easily one of the most dastardly corrupt outcomes of some under handed, miserable & misbegotten legislation to come out of under the Gold Dome in perhaps a generation or more. Just amazing. And no one seemingly could stop it either. The fact that the AJC is no longer even writing about it condemns them to well deserved obscurity. And yet butter would not melt in all those ‘conservatives’ mouths but for one thing: their constant war cry of ‘But NUKES Good!’ Only Liberals hate Nukes!’

    And there went the store, now we’re taxed for something plenty of tax payers may never even see built in their lifetimes or even ever have a hope of using. And the provision for breaks for big industry & other large wasteful industrial users? Just the darling Ga. ‘screw you taxpayers’ touch. Patented. Look for it on all coming legislation. Usually for all new power plants there’s a specific level of ‘buy in’ for these large users. If they don’t, won’t or can’t ‘carry the freight’ it’s Not seen as viable. In Ga. We’ll reverse that for you. We’ll subsidize your recklessness. Just like Wall St., only better, with guaranteed returns seen no place else. Yeah. It’s a money saver for sure. Just not for most of us! JMP

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  • […] concerns about the upcoming House vote on Senate Bill 31, the infamous law that delighted more than seventy  Southern Company  lobbyists by giving the company’s Georgia Power Company over $1 billion in advance profits and a […]

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