Critic says Vogtle deal gives ‘phantom savings’

Georgia Power customers will see only “phantom savings” from a tentative deal between state utility regulators and the Atlanta utility over how to pay for billions in cost overruns at the Vogtle nuclear expansion, according to a green energy advocacy group.

Announcing the tentative deal Thursday, the Georgia Public Service Commission said it will lead to $325 million in ratepayer savings over the next four years, starting in January, if it is approved. The five-member PSC is expected to hold public hearings on the agreement in December or January and then vote.

Georgia Power, the lead partner in the project to add two new reactors at the nuclear complex near Augusta, praised the deal.

“We are pleased with the settlement agreement as it fairly balances the company’s contribution with customer benefits and delivers approximately $325 million dollars in savings to customers during the construction period,” said Georgia Power spokesman Jacob Hawkins.

But the Southern Alliance for Clean Energy, a frequent critic of the nuclear expansion, said Georgia Power won’t have to absorb “one penny” of its share of cost overruns, roughly $1.7 billion.

The group, also called SACE, said the $325 million in claimed savings “appears to be due to merely slowing down the collection of financing costs” rather than a requirement that Georgia Power absorb some overruns.

SACE said the deal apparently also gives the project — already over three years behind schedule — a “de facto” six-month extension and advance approval of up to $2 billion in future spending.

“Georgia Power customers will realize little benefit should the Georgia Public Service Commissioners approve this proposal,” said Sara Barczak of SACE. “It’s really sad to see yet another big power company receiving essentially a free pass for their mistakes that will cost families and businesses money.”

Georgia Power declined to answer questions about the group’s claims.

Tom Bond, PSC’s director of utilities, said, “The settlement does not consist of ‘phantom savings.’ Current customers will actually pay $325 million less than they otherwise would have over the next four years.”

The savings would come from a reduced profit margin for Georgia Power in surcharges — now about $100 a year for a typical customer — it collects in bills to finance the project. The PSC hasn’t said how the deal would affect a typical bill.

Bond said the deal also doesn’t block the PSC from requiring Georgia Power to absorb cost overruns under certain circumstances. Those triggers include the new reactors failing to perform as designed, Georgia Power failing to complete them by the agreed time, or the costs going beyond the limit set in the agreement.

However, the settlement deems all costs through 2015 as “prudent,” including Georgia Power’s share of a $760 million lawsuit settlement with former contractors. Under state law, costs that are deemed “prudent” are eventually passed on to customers.