Georgia Public Service Commission accepts equality rather than equity for Vogtle 3 & 4 cost allocation
The Georgia Public Service Commission (PSC) today neglected an opportunity to pursue equity in rates for residential and small business customers.
These customer classes have funded the vast majority (80%-90% of around $4 billion) collected through the Nuclear Construction Cost Recovery (NCCR) rider while Plant Vogtle Units 3 & 4 have been under construction for the last 14 years. Large industrial customers, on the other hand, have been largely exempt from the NCCR rider and have only contributed around 10%.
Equal is not the same as equitable! Instead of considering what residential and small business customers have already paid toward Units 3 & 4, the PSC approved a negotiated settlement that allocates the associated rate increase equally across all base rate tariffs. This was the biggest disappointment from today’s PSC decision.
The precedent for this was set with another negotiated settlement in 2021. Back then, Georgia Power argued that “equal” allocation was the best they could do without performing a cost-of-service study. That might have been excusable for the initial allocation but it’s dereliction-of-duty that Georgia Power didn’t perform the cost-of-service study two years later. And by letting them get away with it, the PSC is as guilty as they are.
The Vogtle cost recovery settlement that the PSC approved today does limit the total impact on ratepaying customers that are served by Georgia Power Company. Under the stipulation, the Company’s shareholders will be absorbing about half of the exorbitant cost overruns. The final figure approved for inclusion into Georgia Power’s rate base will be $7.562 Billion of capital and construction costs (not including finance cost). The Company had initially requested $8.826 billion (and its share for the total capital and construction cost is upward of $10 billion.) So the impact could have been even worse. Still, however, rates for a typical residential customer will increase by an additional 5%. This will add to the severe energy burden many Georgians already experience.
SACE acknowledges some valid attempts in the stipulation to provide or expand savings opportunities for customers. The commitment to expand demand-side management programs, like energy efficiency, after 2025 is a welcome addition. And SACE is pleased that the Income Qualified Senior Discount will no longer be limited exclusively to seniors. But SACE is disappointed that the stipulation neglects other opportunities to prepare Georgia’s power grid for more clean energy generation and protect ratepayers from costly mistakes like Vogtle in the future.