The Georgia Public Service Commission on Thursday is set to decide the fate of Plant Vogtle, the only nuclear reactor under construction in the U.S., which is years behind schedule and billions of dollars over budget.
At Thursday’s hearing, a commission made of five elected officials, all Republicans, will vote on whether to permit Georgia Power’s new plan for the project, which includes an updated cost projection and construction timeline, or to cancel it.
Georgia Power is estimating $12.2 billion in costs for its 45.7 percent share of the project, and for the reactors to be producing electricity by 2021 or 2022.
This cost estimate is nearly double the company’s original projection, and the timeline is five years behind schedule. The cost of the project for Georgia Power and its co-owners exceeds $20 billion.
The commission's decision will come days after the embattled nuclear industry learned that House and Senate Republicans as part of a tax reform package would not grant the extension of a key tax credit for new nuclear production that could have benefited the Southern Co. plant.
Jeremy Harrell, policy director of Clear Path Action, a group that advocates for clean energy sources such as nuclear power, which has zero greenhouse gas emissions, said extending the tax credit could have sent a strong signal to Georgia’s regulators.
“Southern Co. has said this is essential for projecting financing of Vogtle,” Harrell told the Washington Examiner. “It's not an ideal situation.”
Georgia Power, a subsidiary of Southern Co., has pitched Plant Vogtle since 2009 as a way to revive the U.S. nuclear industry to supplement an aging fleet, promising that two reactors planned for the site would give the state emission-free electricity for as long as 80 years.
Today, 60 percent of the carbon-free energy produced in the U.S. comes from the nation's existing 99 nuclear power plants. Nearly 20 percent of the nation’s electricity is provided by nuclear.
But in March, Westinghouse, the lead contractor on the project that designed the reactors, went bankrupt, imperiling the future of the plant.
In July, South Carolina utilities announced it would cancel a separate plan for two nuclear reactors in the state because of cost overruns after Westinghouse, also the reactor's designer for that project, went bankrupt. But Georgia Power pledged to press ahead with Plant Vogtle, a boon to advocates of nuclear power who stress its zero-emissions status and consider nuclear to be more reliable than wind and solar energy.
Supporters of the project are downplaying the impact of the lost nuclear production tax credit in the final GOP tax bill.
Sen. Johnny Isakson, R-Ga., a prominent Vogtle booster, told the Washington Examiner he expects Congress will extend the tax incentive later this year or early next as part of a package of “tax extenders” for expiring credits. Under current law, developers can receive the credit only if the reactors become active by the end of 2020. That would not meet Vogtle’s extended timeline, so Georgia Power is looking for an extension.
“I am committed to doing whatever I can to ensure that the Plant Vogtle project stays on track for completion to strengthen America’s energy security and to preserve the more than 6,000 Georgia jobs created by this project,” Isakson said. “I have been actively discussing this matter with constituent stakeholders as well as Senate and House leadership, and we are working on a path forward to get a nuclear tax credit extension passed this year or early next year.”
Georgia Power has other important backers. The Energy Department in September offered an additional loan guarantee of up to $3.7 billion to the companies building Vogtle. The department had already guaranteed $8.3 billion in loans to the companies.
The public power companies building the plant have asked the Public Service Commission to allow Georgia Power to recoup Vogtle's new costs from customers. But commission staff filed a document this month arguing that customers would incur too high of a cost to justify the economics of the project.
"Assuming the project is completed, ratepayers would incur significantly higher revenue requirements and a reduced economic benefit while the company's profits would increase," wrote PSC staff consultants Phil Hayet and Lane Kollen, and Tom Newsome, the PSC staff's utilities finance director.
Kurt Ebersbach, a senior attorney at the Southern Environmental Law Center in Atlanta, who is advocating the commission oppose the plan, said the company’s expectations are unfair to ratepayers.
“It’s a very lopsided, heavy-handed proposal for Georgia Power to say we want the commission to approve a revised cost schedule and additional years of delay, in addition to assurances we will recover every last penny from customers,” Ebersbach told the Washington Examiner. “It’s unreasonable.”
John Kraft, a Georgia Power spokesman, insists the benefits of the project will outweigh costs.
“We remain confident that the unified recommendation to move forward with construction represents the best choice for customers while preserving the benefits of a new carbon-free energy source for our state,” Kraft told the Washington Examiner.