Georgia Regulators to Conduct “Non-Review” of Multi-Billion Dollar Cost Increases for Nuclear Power Expansion Project

Guest Blog | November 18, 2016 | Press Releases

Proposed Agreement Rewards Southern Company for Bungled, Massively Over Budget and 45-Month Delayed Plant Vogtle Reactors

Contact: Jennifer Rennicks, SACE, 865.235.1448


Atlanta, Ga. (November 18, 2016) ///PRESS RELEASE/// Today Georgia Power and the Georgia Public Service Commission (PSC) Staff filed joint testimony supporting a controversial Stipulation Agreement proposed last month that fails to provide substantial protections to Georgia Power customers for billions of dollars in increased costs associated with the likely at least 45-month delayed nuclear reactors under construction at Plant Vogtle near Waynesboro along the Savannah River

Separate testimony filed yesterday by PSC Staff and expert consultants in the 15th semi-annual Vogtle Construction Monitoring (VCM) proceeding, was extremely critical of the lack of progress being made on the project, including extreme skepticism that even the 45-month delayed commercial operation dates may met. The testimony also identified that the Company’s estimated project costs using a 39-month delay scenario have increased by $1.8 billion. Further delays will cause additional, significant cost increases.

Below is a statement from Southern Alliance for Clean Energy’s High Risk Energy Choices Program Director Sara Barczak, an intervening party in the Vogtle Supplemental Information Review process, which the clean energy organization has criticized as an expedited, quasi-prudency review:

“We are shocked and dumbfounded by the panel’s testimony. The PSC Staff is completely ignoring and refuting everything it has said for the past six years regarding the construction of the new Vogtle reactors that has resulted in the project being 39-months behind schedule with more delays to come, 45 months or more. The proposed Stipulation means ratepayers will likely pay 100% of all project costs and not one penny of the $1.8 billion in project cost overruns will be denied as imprudent. The worst part of the Stipulation is that it pre-approves $2 billion in costs that haven’t yet been spent.

A massive case of regulatory amnesia is the only explanation for the Commission ignoring the fact that the Company failed to have an integrated project schedule for six years and that there have been years and years of project setbacks such as module construction and other on-going construction problems?

Additionally, the Staff is urging the Commission to pre-approve $2 billion in costs that have yet to be spent! This completely ignores everything the Staff has done to document all the problems – it unfairly wipes the slate clean for Georgia Power and their shareholders. Any future PSC reviews represent empty promises based on what is being done now with this proposed Stipulation. Whatever is unearthed in future monitoring reviews likely won’t matter.

In terms of the proposed Stipulation, it is a major disappointment to consumers for many reasons.

While Georgia Power has spent $3.68 billion on the Vogtle Project to date, the Stipulation certifies $5.680 billion in construction costs as “prudent” and “reasonable” – essentially an advance approval of $2 billion dollars.

There is no public record to evaluate whether the PSC Staff negotiated a fair deal or rolled over to the utility company demands.

The proposed Stipulation clearly rewards Southern Company for their and their Contractors’ bungling of the troubled Vogtle nuclear construction project, which has been plagued with a plethora of serious design, engineering and construction problems from Day One that were identified by PSC Staff over years of testimony.

Georgia Power customers will realize little benefit should the Georgia Public Service Commissioners approve this proposal.”

The PSC press statement from October about the proposed Stipulation identified what appear to be only phantom savings to utility ratepayers while granting the Company guarantee of collection of billions of dollars in increased project costs.

Key items from today’s testimony and the October proposed Stipulation Agreement include:

  • The claimed $325 million in cost savings to customers over the next four years does not represent complete cost savings, in part by merely temporarily delaying the collection of financing costs versus actually denying the Company collection of all of these costs.
    • According to the testimony, of the $325 million in projected savings to customers over the next four years “approximately $185 million will never be paid by any customers, and approximately $139 million will be deferred to be collected over the 60-year life of the Units.” This means that the reduction in the return on equity (ROE) from 10.95% to 10% represents approximately just over $46 million annually.
  • A defacto extension of the construction schedule from the current 39-month delay to 45 months with acknowledgement that it could be even further delayed, with nominal penalty for the Company.
  • Capital costs up to $5.680 billion are considered reasonable and prudent thus no review in the future; despite the fact that $3.68 billion has been spent in capital costs as of the 15th VCM report. This appears to represent approval of $2 billion in advance of those capital costs even being spent.
  • It appears that Staff’s only justification for entering the Stipulation is because, “The current structure of immediate savings could only be accomplished by a stipulation.”


Additional information:

A single public hearing on the “prudency” review will be held at the PSC on Tuesday, December 6, 2016 beginning at 10 am ET. The public is welcome to provide comments to the Commission in person or in writing.

A separate hearing on the 15th semi-annual Vogtle Construction Monitoring (VCM) report will be held on Thursday, December 8, 2016 at 10 am ET; the public can attend and comment in person or submit comments in writing.

Originally Vogtle reactor Unit 3 was scheduled to come online April 1, 2016 and Unit 4 one year later. Georgia Power’s 15th VCM report filed in August had schedule estimates of June 2019 and June 2020 respectively, a 39-month delay, with their estimated share of the project cost as $7.862 billion. The current certified cost for Georgia Power’s share of the project is approximately $6.113 billion, which represented an original $4.418 billion for capital costs. Customers are already paying an additional 9.7% on their monthly bills for the Nuclear Construction Cost Recovery (NCCR) costs due to anti-consumer state legislation passed in 2009 to incentivize building new reactors. Over $1.8 billion in pre-collected financing costs have been charged to ratepayers and the financing costs represent the largest share of the project’s cost overruns. The original approximately $14.1 billion Vogtle project is now estimated to cost well over $20 billion. Georgia Power is 45.7% owner in the project (remaining utility partners are Oglethorpe Power (30%), MEAG (22.7%) and the City of Dalton (1.6%)).

Find more information about Plant Vogtle’s expansion here.


Founded in 1985, the Southern Alliance for Clean Energy promotes responsible energy choices that work to address the impacts of Global Climate Change and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at