Residential customers of Georgia's largest electrical utility could see their bills rise $9 more a month to pay for a new nuclear power plant under a deal announced Wednesday.
Georgia Power Co. said customers would pay $7.56 billion more for Plant Vogtle construction costs under the agreement with utility regulatory staff.
The Georgia Public Service Commission's five elected commissioners must approve any deal, but such agreements are typically persuasive. With the commission's Public Interest Advocacy staff and three ratepayer groups signing on, the agreement is likely to avert contentious hearings over how much blame the company should bear for billions in cost overruns at two new nuclear reactors southeast of Augusta.
Vogtle's Unit 3 and Unit 4 are the first new American reactors built from scratch in decades. Each reactor can power 500,000 homes and businesses without releasing any carbon. But even as government officials and some utilities are again looking to nuclear power to alleviate climate change, the cost of Vogtle could discourage utilities from pursuing nuclear power.
Jacob Hawkins, a Georgia Power spokesperson, said the agreement represents "a balanced approach that recognizes the value of this long-term investment for the state and recognizes affordability needs for customers."
Liz Coyle, the executive director of Georgia Watch, a consumer advocacy group that signed the agreement, said the reactors will never be cheaper than alternative sources of power. But since regulators, traditionally friendly to Georgia Power, allowed them to be built, Coyle said it was important to limit consumers’ exposure.
"I believe that this is the best outcome we could get with where we are in this process," Coyle said.
Public service commissioners declined comment on the deal, saying all the evidence hadn’t been heard.
The project's overall cost, including financing, is currently $31 billion for Georgia Power and three other owners, Associated Press calculations show. Add in $3.7 billion that original contractor Westinghouse paid the Vogtle owners to walk away from construction, and the total nears $35 billion. The reactors are seven years late and $17 billion over budget.
Georgia Power says it has spent $10.2 billion on its share of construction for Vogtle Units 3 and 4, built alongside two earlier reactors. Public service commissioners originally approved the largest unit of Atlanta-based Southern Co. to spend $4.4 billion. After years of delays and cost overruns, the commission said in 2017 that it would consider $7.3 billion as a reasonable cost for Georgia Power.
In a regulatory filing Wednesday, Georgia Power argued that $8.8 billion of the $10.2 billion had been prudently spent on construction, while $1.4 billion was wasteful and should be disallowed. But the company agreed to give up an additional $1.3 billion that it could have sought from customers, amid indications that Public Service Commission staffers would argue that even some spending below the reasonable cap was wasted by mismanagement.
The company says that would work out to an additional $8.95 per month for a typical residential customer, added to the current $153 monthly bill. The increase would begin when Unit 4 enters commercial operation. Georgia Power has loaded fuel into Unit 4 and says it will reach commercial operation before March 30.
Bills went up $5 this month after Unit 3 entered commercial operation. That's atop a $16-a-month increase to pay for higher fuel costs two months ago. There was also an increase in base rates early this year, with another scheduled next year.
Hawkins said Southern Co. shareholders wouldn't absorb additional losses under the agreement, because the company has already written off $3.26 billion in anticipated Vogtle losses since 2018. Georgia Power could seek to recoup some of those losses from contractors, and the agreement allows shareholders to keep all of any such gains.
Georgia Power owns 45.7% of the reactors. Smaller shares are owned by Oglethorpe Power Corp., which provides electricity to member-owned cooperatives, the Municipal Electric Authority of Georgia and the city of Dalton. Some Florida and Alabama utilities have also contracted to buy Vogtle’s power.
Ratepayer groups won other concessions. Georgia Power agreed to double the size of a bill-relief program that applies to some low-income seniors.
The plan is projected to add 96,000 beneficiaries over the next three years. That includes seniors in households with low incomes, and people of all ages who get federal housing vouchers or federal disability payments. The program cuts average monthly bills $33.50.
Georgia Power agreed to a 50% expansion in energy efficiency programs to help reduce energy use and lower bills beginning in 2026. The company also agreed to support state applications for a share of $7 billion in federal money to expand solar energy to low-income households.