SACE | Southern Alliance for Clean Energy

Georgia Public Service Commissioners Ignore Opportunities to Protect Georgia Power Customers from Over Budget and Delayed Vogtle Nuclear Reactors:


Regulators approve vote on construction monitoring docket

Atlanta, Ga. (February 19, 2015) ///PRESS RELEASE/// Today the Georgia Public Service Commission (PSC) unanimously approved an additional $198 million in expenditures despite reports of additional significant delays that will increase the cost of the already over budget nuclear reactors under construction at Plant Vogtle. The Commissioners rejected recommendations from the Southern Alliance for Clean Energy (SACE), an intervener in the semi-annual Vogtle construction monitoring docket (VCM), which could have helped protect Georgia Power’s customers from some of the risks caused by the mounting schedule delays and subsequent cost increases. They did agree to the clean energy organization’s request for the costs associated with complying with requirements of the new surface water withdrawal permit from the Savannah River to be included in subsequent VCM reports. That controversial permit is being legally challenged by the State of South Carolina. Additionally, the Company earlier stated that it would provide a full Integrated Project Schedule (IPS) in the 12th VCM report due at the end of this month. An Advisory Staff recommendation was also accepted for involved parties to provide analysis of both the project’s estimated benefits and detriments. Georgia Power, subsidiary of the Southern Company, is the largest owner in the project and is regulated by the PSC.

Last month Southern Company revealed in a filing with the Securities and Exchange Commission (SEC) that the Consortium (Chicago Bridge & Iron and Westinghouse) predicts an additional 18-month delay. The project was already 21-months delayed. SACE’s brief in the 11th VCM filed at the end of January highlighted testimony showing that many critical path activities are severely delayed and that the possibility of schedule compression also declines as these delays increase. Astonishingly, the Vogtle project lacked a final IPS now six years into construction, which SACE argued was a critical misstep. The PSC Advocacy Staff testified that the lack of an effective IPS to manage this complex Project “[i]n fact runs counter to any prudent project management, nuclear or otherwise, the Engineering, Procurement, and Construction Agreement requirements, and the nuclear industry’s own self-funded INPO Principles for Excellence in Nuclear Project Construction.”

SACE’s brief reiterated that with further delays come additional cost increases for the Toshiba-Westinghouse AP1000 reactors under construction. Testimony from the PSC’s expert witness reaffirmed his calculation that for the Company “…the estimate of the impact of a delay remains about $2.0 million per day at this time.” With the construction schedule likely to be pushed back another 18 months given the recent filing with the SEC, this would add another $1.1 billion in costs and would be in addition to the $645 million in cost overruns for the Company’s portion of the project as reported in the December 2014 Monthly Status Report. These costs also do not include any portion of the over $900 million in costs being litigated by the Consortium and Owners in federal court.

“Another subsidiary of the Southern Company, Mississippi Power, has gotten into trouble for another high capital cost, mismanaged project and ratepayers there are rightfully getting refunded some of their hard-earned money. But here in Georgia regulators hide behind anti-consumer state legislation and seemingly turn a blind eye towards the even more expensive Vogtle project that is billions of dollars over budget, rejecting some common-sense recommendations that could actually help protect customers,” said Sara Barczak, High Risk Energy Choices Program Director with the Southern Alliance for Clean Energy. “Kicking the regulatory can down the road for whatever Commission is in place in 2019 or beyond is not in the best interest of today’s ratepayers. Georgia Power’s customers, who are shouldering all the risk, should not be held responsible for the Company’s mismanagement or for the problems caused by their contractors. With today’s vote the Commission again missed an opportunity deliver a penalty to the Company.”

Georgia Power ratepayers are currently paying an additional over 9.4% on their bills for the Nuclear Construction Cost Recovery (“NCCR”) Rider due to anti-consumer state legislation passed in 2009 to incentivize building new reactors. The Company began collecting the NCCR tariff in 2011 for financing costs and taxes that would normally be recovered over the normal life of the facility; over $1 billion has been collected for this “nuclear tax.” SACE’s brief argued that to allow the Company to over collect any financing costs above the current approved certified cost of $6.113 billion places an unnecessary financial burden on ratepayers.

SACE also requested that the PSC prevent Georgia Power from collecting any return on equity (ROE), currently set at 10.95%, on the pre-collected portion of the financing costs arguing that this measure could help offset the project’s current cost overruns. Typically a regulated utility’s ROE is provided to cover the cost of financing and to provide investors with an adequate incentive to offset the risk of investment. However, SACE explained that Georgia Power pre-collects its financing costs before Plant Vogtle is operational and there is therefore no risk to the utility and it would have been reasonable for the Commission to decide that no return on equity should be paid.

“The Vogtle project is over budget and three years behind schedule,” said attorney Robert Baker, representing SACE. “Regulatory and legislative changes must be made now to protect ratepayers.”

Additional information: Originally reactor Unit 3 was scheduled to come online April 1, 2016 and Unit 4 on April 1, 2017. The current certified cost for Georgia Power’s share of the project is approximately $6.113 billion. With the already affirmed 21-month delay, the Company’s cost estimate has increased to approximately $6.8 billion (Georgia Power’s 11th VCM Report, Table 1.1, p. 37). Georgia Power is 45.7% owner (remaining utility partners are Oglethorpe Power (30%), MEAG (22.7%), and City of Dalton (1.6%). This means the original approximately $14.1 billion Vogtle project is estimated to cost approximately $15.5 billion. With an additional 18-month delay at a cost of $2 million per day and additional costs still being litigated between the Owners and the Consortium, the full project cost estimates are likely to be over $18 billion.


Founded in 1985, the Southern Alliance for Clean Energy is a nonprofit organization that promotes responsible energy choices that create global warming solutions and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at