If you spend time studying your Georgia Power bill, you might have noticed three, $25 “Vogtle Settlement Refunds,” in April, July and September.
They’re related to Plant Vogtle, the only nuclear power plant under construction in the country, near Augusta. (These are different from other refunds issued, related to the Tax Cuts and Jobs Act.)
To understand their story, we’ve got to go back about 10 years and remember that all Georgia Power ratepayers are helping to fund Plant Vogtle construction.
In 2009, the General Assembly passed a law that allows Georgia Power to charge a fee on customers’ bills to help cover financing costs before the new nuclear power reactors are in operation. During the debate, State Senator Don Balfour, who sponsored the bill said, “If this bill passes, this bill is good for the individual consumer. This bill is good for every homeowner. It’s also good for businesses.”
That legislation allowed for the “nuclear construction cost recovery” line item on every Georgia Power bill.
According to Georgia Watch, a consumer advocacy group, the average residential Georgia Power customer has paid nearly $600 towards Plant Vogtle since 2011.
Since then, the costs of Vogtle have gone up. The total projected budget is at least $25 billion, about double the original estimate. The expansion was also already supposed to be done by now. The current target is by 2022.
It’s been called one of the most expensive infrastructure projects in U.S. history. So expensive that the contractor building it, Westinghouse, went bankrupt last year.
That was a big problem, because Westinghouse and its parent company, Toshiba, owed Georgia Power and the other owners of Vogtle money.
“I was very concerned about whether Toshiba was really going to make the payment or not,” said Tim Echols, who’s on the Public Service Commission which regulates Georgia Power.
“Westinghouse owed creditors, vendors a bunch of money. If Toshiba didn’t make that payment, that would put us in a place when we were really, really behind where we wanted to be on the plant.”
The Vogtle owners, including Georgia Power, did get about $3.7 billion from Toshiba. Georgia Power received about $1.5 billion, and most of it went directly to Vogtle.
But Echols suggested about $188 million go back to Georgia Power customers: $75 per customer, in three, $25 payments.
“I came up with this idea of refunding this back in three different payments to make sure that when people looked at the bill, that they said ‘Oh wow, I’m getting a refund on this. This is some good news.’ And frankly, we needed some good news about the plant,” he said. “I wanted to do it multiple times to make sure that customers knew that the Public Service Commission was working on their behalf, that we had done everything we could do to make the best of a bad situation and certainly getting the money from Toshiba was an important part of moving forward.”
‘A Payday Loan’
In the long run though, the refunds will actually cost ratepayers more.
Dawn Randolph, a Democrat running for the Public Service Commission against incumbent Tricia Pridemore, compares the rebates to “a payday loan.”
“And the reason I think that is, because when you do the math, if they had used the money to pay down the current loan on Plant Vogtle, then it would have saved us money,” she said. “In the long term, we’re going to have to pay interest on the money they didn’t pay down.”
So basically, if that money had gone straight to the project, rather than to customers, there’d be less interest to pay later. Interest that Georgia Power customers will continue to pay over time.
Georgia Conservation Voters estimates the refunds will actually cost each customer nearly $400 over the long term.
Georgia Power declined to provide a number.
“We really view the rebates as more of a distraction from the main issue here,” said Jill Kysor, a staff attorney with the Southern Environmental Law Center. “So while customers did already receive three, $25 credits on their bills, in reality, the Plant Vogtle project is billions of dollar over budget, years behind schedule, and the rebate issue is really just distracting from the big picture, what’s really happening.”
Randolph pointed to this being an election year as the reason for the rebates.
Democrat Lindy Miller is also running for the Public Service Commission against Republican incumbent Chuck Eaton. She too, calls the rebates a “gimmick” during an election year, with the final installment scheduled for September, just before early voting.
“We’re saying we’ll give you $75 now, which by the way is no small thing for families across the state; that’s real money,” Miller said. “But it means that that $188 million could not be invested in capital costs. Which means future ratepayers will bear the burden of the cost of that rebate.”
“Most folks aren’t thinking about Plant Vogtle,” she said. “Most folks are thinking about how am I going to buy another pair of shoes for my kid who wore out his shoes. Schools are thinking about how am I going to train my teachers and keep the lights on. These are real tradeoffs. So when we try and assuage things with $75, you’re not getting to the real issue about how we make decisions that benefit people’s lives.”
Echols’ original motion about the rebates mandated they happen by the end of the 3rd quarter of the year. (See here, number 11.) He said Georgia Power selected the months.
Public Service Commissioner Chuck Eaton disputes the allegation that the refunds are a “gimmick.”
“If the goal was just to do a gimmick, we would have just done a big bump right before the election,” he said. “I never view giving somebody $25 a gimmick. That’s real money and people need that money.”
Bubba McDonald is chair of the Public Service Commission. He said the short-term benefit is worth it: “There’ll be people like me, at my age, that won’t be enjoying that good, clean power down the road. I’ve put a lot into it, maybe I can get a little bit back out of it. And that’s what I think is good policy for us.”