Regulators to consider another Georgia Power rate hike

Unit 3’s reactor and cooling tower stand at Georgia Power Co.'s Plant Vogtle nuclear power plant on Jan. 20, 2023, in Waynesboro, Ga. (AP Photo/John Bazemore, File)

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Georgia’s Public Service Commission is poised to raise electricity rates for most Georgians to cover the cost of building new nuclear reactors at Plant Vogtle. Hearings begin next week on the latest in a series of bill increases for Georgia Power customers.

As the commission prepares to vote, its own elections remain in limbo amid a Voting Rights Act lawsuit. A federal appeals court recently issued a ruling in that case.

The first of two new nuclear reactors at Plant Vogtle went online earlier this year, and Georgia Power has said the second should go into service early next year. The construction took years longer than projected and has cost more than twice the original budget.

Georgia Power, PSC staff and several advocacy groups have already agreed to a deal over how much of the Vogtle costs customers have to pay. It works out to a bill increase of about $8.95 per month for the average customer. But those groups don’t have final say; the five elected public service commissioners do. They’ll hear testimony on the proposed deal, known as a stipulated agreement, beginning Monday, before voting on Dec. 19.

If the PSC approves the rate increase, it would kick in after Plant Vogtle Unit 4 comes online next year and represent the fifth power bill hike for Georgia Power customers since Jan. 1, 2023.

Long-awaited hearings

Construction on the new reactors at Plant Vogtle began in 2009, with an expected price tag of $14 billion and a projected opening date of 2017. In the more than a decade it’s taken to build the units, the costs have more than doubled, to an estimated total of over $30 billion.

Georgia Power co-owns the Vogtle project with other power generation companies, so the company is not responsible for the total cost of financing and building the new reactors. 

But Georgia Power owns the largest share. By the end of construction on the second reactor, Unit 4, the company expects it will have racked up construction costs of more than $10 billion. And it’s allowed to pass any of those costs that the PSC deems reasonable and prudent on to its customers. Advocates and staffers have long expected lengthy hearings once Plant Vogtle was done, to comb through the project spending and determine what was prudent and what wasn’t — and therefore, exactly what costs customers will have to pay.

The stipulated agreement announced in August truncates that process. In it, the PSC’s Public Interest Advocacy Staff, Georgia Power and consumer advocacy groups including the Partnership for Southern Equity and Georgia Watch agreed to deem $7.5 billion in Vogtle costs reasonable and prudent; the company agreed to shoulder the remaining $2.6 billion.

“I think it’s a decent deal in terms of the ultimate dollar figure that they arrived at,” said Bryan Jacob of the Southern Alliance for Clean Energy, which didn’t sign the deal. “It’s a little unclear how they got there.”

Jacob called it “problematic” that the accounting happened without the usual extensive back-and-forth in the public record that characterizes PSC proceedings. Other critics of the deal were more pointed.

“Throughout the 14 years of plant Vogtle’s project history, these commissioners have declined to review the cost overruns … because they have said that at the end of the construction period, they would review the costs very closely under what’s called prudency,” said Patty Durand, who’s running for a seat on the commission and will testify as an expert witness next week. “And now here we are at the end of the process. And now they’re not going to do that.”

During next week’s hearings, consultants for the PIA staff will testify and present evidence to bolster the stipulated agreement. Their written testimony, pre-filed in October, acknowledges significant mismanagement of the Plant Vogtle construction.

“The Project was impacted by the known risks and unreasonable and imprudent management decisions, and the result were impacts and disruptions that ultimately led to significant delays and cost increases essentially across all phases of the work,” wrote Reza Nikain, Mark Cohen and Robert Strahle of JS Held, a construction advisory consulting firm, in their testimony.

Their testimony and that of other expert witnesses brought in by the PIA staff also breaks down the specific project costs as prudent or imprudent, reaching totals that match the deal on the table.

The parties involved in PSC proceedings often reach stipulated agreements like this one, though in recent cases that’s happened only after extensive public testimony and cross-examination. The commission typically approves them with little to no change, which PSC watchers expect will happen this time.

“I see this as a fait accompli,” said Jacob. “The commission is very likely going to endorse the stipulation as it’s been filed.”

For his part, Jacob said he’ll be advocating for a relatively small change to the agreement. For years, Georgia Power customers have paid a fee on their monthly bills known as Nuclear Construction Cost Recovery, designed to cover the financing costs for the project. But a particular type of power rate used mostly by large, industrial companies was exempt, according to Jacob, meaning residents and small businesses have already paid significantly more for Plant Vogtle than larger companies. He said he’ll ask the commission to adjust for that disparity in distributing the final Vogtle costs.

Durand said she plans to testify against what she called a “secret deal,” but she also expects the commission to approve it.

Elections in limbo

It’s not clear when Georgians will next vote in a PSC election.

The five members of the commission each have to live in particular districts, but are elected by voters statewide. That election design prompted a lawsuit brought by a group of Black voters in Atlanta. They argued that this diluted their votes and made it so a majority-Black district couldn’t elect the representative of its choice.

The suit alleged it was a violation of the Voting Rights Act. Last year a federal judge agreed, and halted the elections for two commissioners that were scheduled for November 2022.

But last week, the 11th U.S. Circuit Court of Appeals reversed that decision. 

“It adds the agony, insult to injury,” said James Woodall, one of the plaintiffs. “We’re already not being allowed to elect candidates from choice. And now we have the 11th Circuit essentially telling us, ‘Hey, so bad, so sad.’”

The Georgia Secretary of State’s office has not responded to inquiries about election scheduling. Commissioner Tim Echols, whose reelection race against Durand was suspended by last year’s court ruling, declined to comment on the appeals court decision, as did a spokesman for the PSC.

Woodall was frustrated that the appeals court did not address whether or not there had been discrimination, but rather took issue with the proposed remedy of district-specific elections. The decision said this proposal “strains…to the breaking point” the concept of federalism, or the division of power between the national and state governments.

“Plaintiffs’ novel proposal is that we dismantle Georgia’s statewide PSC system and replace it with an entirely new districted system,” wrote Judge Elizabeth Branch on behalf of the three-member appeals court panel. “But we have never gone this far.”

The decision fits into a larger pattern that has seen courts “chisel away” at the Voting Rights Act in the last decade, said Alicia Hughes, the interim executive director of Emory’s Center for Civil Rights and Social Justice.

“This decision is not, unfortunately, it’s not surprising,” she said. “And I would not expect it to be overturned.”

But because the elections for the PSC are statewide, this is also an unusual case, Hughes said, less clear-cut than the racial gerrymandering rulings that have forced Georgia, Alabama and other states to re-draw their congressional boundaries. The recent elections of U.S. Sens. Jon Ossoff and Raphael Warnock, both Democrats who drew substantial support from Black voters, have shown that those voters’ chosen candidates can win statewide races, she said. 

A key point of contention in the PSC case has been whether the issue is an electoral disadvantage based on race, which the Voting Rights Act prohibits, or on party preference, which the courts have deemed allowable. Hughes said it’s important not to blur the distinction between the two.

“I prefer to split the hairs and ensure that we get minorities being able to elect representatives of their choice in elected government,” she said.

Woodall said he and his fellow plaintiffs are considering their options for a possible appeal.

“This isn’t the end. And we’re not going to give up our fight because the right of Black voters is crucial to the protection of democracy,” he said. “We’re already seeing the impact of what not having access to that franchise is meaning. We’re talking Plant Vogtle, we’re talking rates, rate hikes, we’re talking utility rates and the ability for people all over this state to be able to afford their utilities.”