Human Behavior

There is definitely no logic to human behavior.

The PSC will have to face reality

On St. Patrick’s Day in 2009, the Public Service Commission sat down to consider one of its most important cases ever.

The commissioners had before them a proposal from Georgia Power to build two more nuclear reactors at Plant Vogtle. Georgia Power was also demanding that the PSC authorize the company to start charging its customers for the financing costs of the project at least six years before any electricity would actually be generated by the new reactors.

This was in the early months of the worst economic downturn to hit Georgia and the U.S. since the Great Depression. People all over the state were losing their jobs and their livings, but Georgia Power insisted on taking even more money out of their pockets with these early surcharges.

The only PSC member who stood up to the utility’s juggernaut was Commissioner Bobby Baker. Baker noted the economic uncertainty and said the commission should take the time to get more information before making a decision that would have such an impact on consumers.

“We don’t need to make this decision today,” Baker said. “You’re taking a big gamble with Georgia Power’s money, the ratepayers’ money. If you want to roll the dice, roll it with your own money. We’re talking about billions of dollars here.”

Commissioner Stan Wise, who’s been a faithful supporter of Georgia Power throughout his tenure on the PSC, was in no mood to hear such talk.

“Who are you telling that to?” Wise sneered. “We know.”

The PSC voted 4-1 to approve the Vogtle project and to authorize Georgia Power to start charging its customers in advance. Baker cast the lone dissenting vote.

With the advantage of eight years’ hindsight, we know a couple of things with certainty: Baker was right. Wise, along with Commissioners Chuck Eaton, Bubba McDonald, and Doug Everett, was wrong.

It turned out that 2009 was not such a good time to try to revive the nuclear industry. The price of natural gas was dropping steeply, while it was becoming cheaper to generate electricity from solar and wind farms. The demand for electricity was also falling. Those factors all knocked down the economic rationale for nuclear power.

Nuclear projects are also complicated and costly, as the PSC would have known from studying its own history. Georgia Power had massive cost overruns from the first two reactors it built at Plant Vogtle, and it soon started running into the same problems on units 3 and 4.

Thus it is that we have a nuclear project that is $3 billion over budget, 39 months behind schedule, and has not generated a single watt of electricity. Georgia Power’s wise men once claimed that the first reactor would be operational by 2016. They’re now saying it might start up by 2020, if then.

Baker is no longer a PSC member. He did not run for reelection in 2010 and was replaced by Tim Echols. Echols and the four commissioners who originally voted to authorize this boondoggle are soon going to have to face the consequences of that decision.

The cost overruns on Vogtle and a similar project in South Carolina have driven the primary contractor, Westinghouse Electric Co., into bankruptcy. Westinghouse’s parent company, Toshiba, is giving every indication that it wants to get out of the business of building nuclear plants.

Georgia Power signed an interim agreement with Westinghouse for the company to continue working as the primary contractor until April 28. After that, the choices aren’t good.

If the contract with Westinghouse is terminated, Georgia Power will have to find another contractor. There aren’t many companies, however, who have the ability or resources to take on such a huge project.

Georgia Power is also suggesting that it just might take over the project itself if Westinghouse is out.

Whatever happens, you can bet that Georgia Power will come back to the PSC and report that the project has suddenly gotten more expensive to complete. They will then demand that the commissioners allow them to charge off all the new expenses to the utility’s customers.

Up to now, the PSC has been happy to grant Georgia Power nearly all of these writeoffs. It doesn’t really care if homeowners and small businesses get stuck with higher bills.

We are nearing a point, however, where the higher costs of electricity will start being felt by large businesses and industries. Companies that might think of relocating here will take a look at the skyrocketing rates and decide to go somewhere else. That will bring immense pressure on the PSC.

The Public Service Commission now has to deal with a monster it unleashed with that vote back in 2009. Will it have the backbone to tell Georgia Power that its shareholders will have to eat some of those cost overruns?

If history is any guide, that answer will be no.

© 2017 by The Georgia Report

Tags: Georgia Power , Plant Vogtle , PSC

One Comment

  1. dan purdy
    Posted June 7, 2017 at 1:47 pm | Permalink

    Asking for another contractor for this failure would be suicide for that business. Everybody involved in this is making money. Did you ever hear the old saying good money after bad. Somebody needs to go to jail and forfeit there wealth back to the people it was taken from. This is highway robbery. You are part of the Swamp that needs to be drained. Do you think this country can’t fail? Did you ever hear of the Roman Empire. I say this monopoly should be broken up in to small parts that can be controlled, that are not to big to fail. What you all are doing is immoral and should be illegal if it is not already. So Company should suffer the consiquences of your actions and so should the PSC. Dan Purdy

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