SACE | Southern Alliance for Clean Energy

Georgia PSC to review all Vogtle costs to date


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Vogtle NPP construction site, July 30, 2015. All photos copyright (c) 2015 - contact for further information.

Vogtle construction – Photo: High Flyer / SRS Watch

With little advance notice the Georgia PSC approved a complete prudency review of all costs for Vogtle Units 3 and 4 incurred to date at its February 18 Administrative Session. On January 28 all the parties to the 13th semi-annual Vogtle construction monitoring (VCM) review, which included the Southern Alliance for Clean Energy (SACE), were expecting to discuss Georgia Power Company’s request to recover the $350 million in litigation settlement costs to its contractors, Westinghouse and Chicago Bridge & Iron and an additional $69 million for costs associated with cybersecurity and onsite security that were not part of the major litigation, but instead a surprise motion by Commissioner Wise expanded the review from just the $419 million to also include over $7.862 billion (as of the 15th VCM) just for Georgia Power’s share of the estimated project costs. Including the $419 million, this represents an increase in project costs of more than $1.8 billion above the original certified cost in 2009 of $6.113 billion.

The Georgia Commission’s decision to initiate a full prudency review is highly unusual because normal procedures have been completely ignored. It was unclear whether multiple hearings with the presentation of witnesses for cross-examination would occur. To complicate matters the PSC Staff had no advance notice of the prudency review prior to January 28, and likely had little to no budget for the additional staff and consultants needed to conduct a thorough review. Additionally, the Georgia PSC had an extremely full agenda for 2016 with the Georgia Power IRP, the review of the merger of AGL Resources with Southern Company and two semi-annual Vogtle construction monitoring reviews.

According to the PSC’s Order, Georgia Power was scheduled to file its responses to a set of questions regarding the litigation settlement and Project costs by April 5. Parties were only to have 30 days to file comments and the PSC Staff may conduct discovery and is “authorized to engage in any settlement talks with the Company and intervening parties . . .” over six months. SACE requested an extension and parties consequently received an additional two weeks. We filed our response to Georgia Power’s April filing on May 19 and continue to be fully engaged in the prudency review process because of the huge financial impact this significantly delayed and over budget project will have on all ratepayers. The PSC Staff was to report by October 19 on the status of the settlement negotiation discussions with Georgia Power, but this was extended based on a request by the Company until October 28, 2016. But late on October 20 the PSC Staff issued a proposed Stipulation that offers much to the Company and virtually no protections for utility customers.

SACE developed a summary of the prudency review in October that outlined the process and timeline, our concerns and a “Vogtle by the Numbers” list. Additional information/articles of interest (not a full list as some require a paid-subscription):

Typically, a thorough prudency review is not an expedited process and several hearings with witnesses are held. And if a Stipulation is proposed, that happens after hearings are held and testimony is filed — essentially when there is record of evidence. Instead, for this “Supplemental Information Report” process, a Stipulation was proposed before a record of evidence wad developed — it’s also pared back as just a single public hearing was held on Tuesday, December 6 at 10 am with a joint panel comprised of just two Georgia Power witnesses and two from the PSC Staff, which includes one consultant. Their testimony was filed on November 18; see our press release about the minimal testimony here. Intervening parties had to file briefs by December 13 — find SACE’s here — and the Commission rendered a disappointing decision on December 20.