Southern Company’s three-legged nuclear regulatory-capture stool

The failed EDF nuke project at Calvert Cliffs in Maryland makes it clearer why Southern Company (SO) was the first company to get a nuclear permit in 30 years: it was the only one big enough and monopolistic enough to pull it off. Even then it’s such a bet-the-farm risk that even “great, big company” SO only dared to deploy its great big huge scale equipment with the regulatory capture triple-whammy of a stealth tax on Georgia Power bills, PSC approval of cost overruns, and an $8.33 billion federal loan guarantee:

  1. a legislated stealth tax in the form of a rate hike on Georgia Power customers for power they won’t get for years if ever. If you’re a Georgia Power customer, look on your bill for Nuclear Construct Cost Recovery Rider. You’ll find it adds about 5% on top of your Current Service Subtotal. Georgia is one of only a handful of states where such a Construction Work in Progress (CWIP) charge is legal thanks to our regulatory-captured legislature. Doubling down on bad energy bets, Southern Company is also trying to use CWIP to build a coal plant in Mississippi.
  2. A captive Public Service Commission that rubber-stamps costs for Plant Vogtle. In case there was any doubt as to the PSC’s role in legitimizing those new nukes, the very next day Fitch reaffirmed Southern Company’s bond ratings.

    Southern Company’s regulated utility subsidiaries derive predictable cash flows from low-risk utility businesses, enjoy relatively favorable regulatory framework in their service territories, and exhibit limited commodity price risks due to the ability to recover fuel and purchased power through separate cost trackers.

    Translation: Georgia Power customers subsidize SO’s bonds and SO shareholders’ stock dividends. The PSC also approved cost overruns being passed on to Georgia Power customers, and those nukes are already over $400 or $900 million, depending on who you ask. What do you expect when 4 out of 5 Public Service Commissioners apparently took 70% of their campaign contributions from utilities they regulate or their employees or their law firms, and the fifth commissioner took about 20% from such sources? Hm, there’s an election going on right now!
  3. An $8.33 billion federal loan guarantee. Even that’s not good enough for SO and Georgia Power: SO is asking for less down payment.

And what if even one of that three-legged regulatory capture stool’s legs went away? If we elect new Public Service Commissioners and legislators this year, one or both of the Georgia legs could get revoked. And if we lobby Congress and the federal government, maybe that federal loan guarantee, which apparently has never been finalized, might never get finalized. Then we could stop pouring money down that rathole on the Savannah River and get on with efficiency, wind power, and solar power, both utility scale, such as GaSU’s 90MW proposal, and distributed rooftop, such as Austin Energy pioneered way back in 2003.

If Cobb EMC can switch from coal to solar, Georgia Power and Southern Company can switch from nuclear to efficiency, wind, and solar. Georgia Power’s additional 210 MW solar is a move in the right direction, but still a baby step.

We’ll know SO and Georgia Power are serious about when they stop getting in the way of changing the 1973 Georgia Territorial Electric Service Act catching up with the rest of country and the world that currently only permits you to sell power you generate to your one and only electric utility at whatever rate that utility has set. We need to change that law so in Georgia like in most states we can have a real energy market. Kick one of the legs out from under that three-legged regulatory capture stool and the nuke boondoggle will collapse, leaving SO and Georgia Power no excuse. Then the clean energy sun can rise on Georgia.



PS 2012-10-02 10PM: Here’s a list of the legislators who voted for CWIP. Consider voting for their opponents.

The two Public Service Commission candidates challenging the incumbents are:

You don’t even have to wait for November. If you’re a Georgia Power customer, you can pay your CWIP payment in a separate check, with a comment saying you’d rather have renewable energy. Even if you’re not, you can write to Georgia Power, or Southern Company, or the GA PSC. Here are some contacts.

One thought on “Southern Company’s three-legged nuclear regulatory-capture stool

  1. Pingback: Fossil fuels get five times the subsidies of renewable solar and wind | On the LAKE front

Comments are closed.