Category Archives: CWIP

Florida utility delays nuke, asks for rate hike

Florida is already experiencing a likely future for the new
Plant Vogtle nukes in Georgia:
completion date pushed back, and customer charges raised.

Fred Hiers wrote for Gainesville.com 1 May 2012,

Progress asks for nuke fee hike,



Progress Energy announced Tuesday that it is hiking the estimated
cost of its proposed Levy County nuclear plant and pushing the
plant’s completion date back to 2024.

Progress Energy also said it plans to ask Florida regulators to
increase customers’ bills to upgrade Progress’ damaged Crystal River
nuclear plant.

Progress said in a press release that the new cost of the plant
could be as high as $24 billion. The previous estimate was about $2
billion less. The plant was originally slated to go online in 2016,
but that deadline continues to get pushed back.

2016 to 2024? An eight year delay?
And from $22 billion to $24 billion, or 9% more?
It looks like Progress Energy has started down the
path of many $billion cost overruns that

The Southern Company and Georgia Power already went down
30 years ago and have already started back down again.
Georgia Power customers: don’t be surprised if your rates go up more
for nukes that get pushed still farther into the future.

Meanwhile, by

John Hanger’s estimates,
an extra $1 billion would buy about 450 MW of wind power or about 330
MW of solar power.
So that $2 billion expected cost rise would buy about

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How Much Wind and Solar Capacity Would a Billion Dollars Buy?

Those cost overruns so far on the new nukes? How much solar and wind could that money buy?

John Hanger wrote on his Facts of the Day today, $913 Million Construction Overrun Hits Georgia New Nukes: How Much Gas, Wind, Solar Capacity Would That Buy?

Comparing the Vogtle initial $913 million cost overrun to the capital costs of gas, wind, and solar plants show just how big these cost overruns can be. The Vogtle $913 million cost overrun by itself could have paid for approximately 1,000 megawatts of natural gas generation; 450 megawatts of wind power; and 330 megawatts of solar power.

Don’t forget that’s just the first cost overruns on those nukes. When the current Plant Vogtle nukes were built, there were supposed to be four at a cost of $660 million; only two were built, at a cost of $8.87 billion. That’s a cost overrun of 1300%. How much solar and wind could $8 billion buy?

Moreover, gas, wind, and solar generation could be up and running in 3-years or less from the first day to the last day of development, as opposed to the 10 years or more needed to build a nuclear plant.

Austin Energy’s new 30 MW solar farm, for example, approved beginning of 2009, opened end of 2011, and cost less than originally projected.

Oh, and solar doesn’t leak radioactive tritium like Plant Hatch and won’t get shut down two days after an NRC clean bill of health like Plant Vogtle.

-jsq

 

Cost overruns already starting for Georgia Power’s new nukes

Remember how Georgia Power customers get to pay for cost overruns on the new nukes? Well, the overruns have already started.

JoAnn Merrigan wrote for WSAV 15 May 2012, Environmental Groups: Plant Vogtle Reactors Almost One Billion Over Budget,

A group of nine national environmental groups says that the two new nuclear reactors being built at Plant Vogtle (near Waynesboro in eastern Georgia) are over budget by up to $1 billion dollars. The opponents say Georgia Power’s share of the cost overruns is currently $400 million and that may cost ratepayers as well as taxpayers who are guranteeing loans in the billions of dollars.

The nine environmental groups, Friends of the Earth, Southern Alliance for Clean Energy, Blue Ridge Environmental Defense League, Center for a Sustainable Coast, Citizens Allied for Safe Energy, Georgia Women’s Action for New Directions, NC WARN, Nuclear Information and Resource Service, and Nuclear Watch South, are also suing:

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Who voted for Georgia Power’s nuke rate hike (CWIP)?

Who voted for that

Nuclear Construction Cost Recovery Rider
that appears on your Georgia Power bill,
charging you for electricity you won't get from the new plant Vogtle
nukes for years?

Project Vote Smart has

lists of Yeas and Nays for


that Construction Work in Progress (CWIP) charge,
which was in
2009’s SB 31,
"Energy Rate Increases to Finance Nuclear Power Plant Construction".

Compliments to all who voted Nay to this stealth tax
that is slowing down deploying renewable energy in Georgia,
delaying the solar and wind clear path to jobs and energy independence.
Georgia Power customers can also

vote against CWIP with their bill payments.

First let's look at our local delegation:

District Who Party Voted
8 Sen. Tim Golden Turncoat Yea
174 Rep. Ellis Black Turncoat Yea
175 Rep. Amy Carter Turncoat Yea
176 Rep. Jay Shaw Democratic Yea

Every one of our local delegation voted for the CWIP rate hike.
Here "Turncoat" as a party indicates they were Democrats at the time,
but since got re-elected as a Democrat in 2010 and then became Republicans
after the election.
Democrat Jay Shaw did not run again.
His son Jason Shaw ran as a Republican and won.
Project Vote Smart is a bit confused by that, and by the party switching,
so I've corrected those points in these lists.

Why do the Yeaers want to let Georgia Power charge its customers for
electricity they won't get for years, if ever?

Also, notice every Democratic and one Republican co-sponsor of SB-31
is out of office.

Don Balfour (GA – R)

J.B. Powell (GA – D) (Out Of Office)

Chip Rogers (GA – R)

Mitchell W. 'Mitch' Seabaugh (GA – R) (Out Of Office)

Ed Tarver (GA – D) (Out Of Office)

Thorborn 'Ross' Tolleson Jr. (GA – R)

Hm, maybe voting for that nuke boondoggle wasn't good politics….

Here are the complete lists of votes on SB 31 for
Senate
and
House.
In the
House list there's former Speaker Glenn Richardson

not voting!
And now he and former Governor Roy Barnes are

suing Georgia Power about CWIP.

-jsq

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If Southern Company’s nukes are a good deal, why so many insider stock sales?

If the Southern Company’s slick nuclear financing deal and its ongoing operation of three of the country’s dirtiest coal plants (two of them in Georgia) is such a good deal, why are so many insiders selling so much stock?

Maybe SO CEO Thomas A. Fanning needed that $12.4 million he got back in January by selling 275,617 shares at $45.0693 per share for a new yacht, or a new wing on his house, or something. A brief scan of nearby energy companies (Duke and Progress) indicates it’s not unusual for an energy company CEO to sell shares, although mostly not for this much dollar amount. $12.4 million is more than twice Fanning’s 2010 salary of $6.02 million, and well more than his 62% raised 2011 salary of $9.75 million that Georgia Power customers get to help pay for through Construction Work in Progress (CWIP) charges for the new nukes at Plant Vogtle that won’t be built for years, if ever.

But what’s with two SO subsidiary company CEOs, Mark A. Crosswhite, President and CEO of Gulf Power ( #206 on the Forbes Global 2000 in 2010) and Edward Day VI, President and CEO of Mississippi Power Company ( former engineering group supervisor at the Hatch Nuclear Project) selling a bunch of stock in April? Also there have been only a couple of puny little purchases, each of less than $30,000, in the past year. Why so much selling and so little buying by insiders?


Maybe new nukes are an increasingly bad business risk for Southern Company and Georgia Power. Perhaps some economic expert can help with this question;
how about
Moody’s?
Maybe

Georgia Power customers and Georgia and U.S. taxpayers and voters have an opinion?

I wonder what will happen to SO’s insider trading patterns when SO’s illusion of certainty of profit from nuclear and coal eventually becomes obvious even to their board and shareholders as actually a big risk, and when SO realizes Cobb EMC made the right choice for profit by ditching coal plant plans and building solar plants instead; when SO finally suddenly switches to solar like Cobb EMC and Austin Energy already did. Will insiders decide SO’s stock has become a good buy when SO builds solar and wind plants?

-jsq

Nuclear’s “bet-the-farm” risk —Moody’s

Wonder why Southern Company couldn’t get private financing for its new nukes at Plant Vogtle? Because back in June 2009 bond-rater Moody’s said this:

But from a credit perspective, the risks of building new nuclear generation

are hard to ignore, entailing significantly higher business and operating risk profiles, with construction risk, huge capital costs, and continual shifts in national energy policy.

In case that wasn’t clear enough, they spelled it out further.

Nuclear’s “bet-the-farm” risk

The NRC says about 14 companies to date have submitted COL applications, proposing numerous new nuclear reactors for power generation. The first of these COL’s is expected to be approved beginning in mid-2011. Many of the COL license applications include partners, but the next table lists the primary holding company entity behind each project, and our view of the activity level associated with the endeavor.

From a credit perspective, companies that pursue new nuclear generation will take on a higher business and operating risk profile, pressuring credit ratings over the intermediate- to long-term.

Moody’s wraps up with some reassuring words for financiers, but maybe not so reassuring to we the taxpayers:

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New nukes increasingly bad business bet for Southern Company and Georgia Power

Harvey Wasserman wrote for HuffPost 9 April 2012, America’s 2 New Nukes Are on the Brink of Death,

The only two U.S. reactor projects now technically under construction are on the brink of death for financial reasons.

If they go under, there will almost certainly be no new reactors built here.

The much mythologized “nuclear renaissance” will be officially buried, and the U.S. can take a definitive leap toward a green-powered future that will actually work and that won’t threaten the continent with radioactive contamination.

Those are the stakes. And in that high-stakes poker game, it seems Southern Company is doing a little bluffing.

In Southern Company’s (SO) Q1 2012 Earnings Call 25 April 2012, its CEO Thomas Fanning revealed another little flaw in the project:

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Southern Company wants even more special nuke loan terms

Southern Company wants even more special loan guarantee terms for its new Plant Vogtle nukes. When that or CWIP gets revoked, maybe Southern Company will see that solar is a lot less trouble, and more profitable.

The license authorized by the NRC 9 February 2012 for the new Plant Vogtle nukes is the first one in thirty years. Harvey Wasserman wrote for CounterPunch 18 April 2012, The Big Liability,

It’s about a proposed $8.33 billion nuke power loan guarantee package for two reactors being built at Georgia’s Vogtle. Obama anointed it last year for the Southern Company, parent to Georgia Power. Two other reactors sporadically operate there. Southern just ravaged the new construction side of the site, stripping virtually all vegetation.

It’s also stripped Georgia ratepayers of ever-more millions of dollars, soon to become billions. This project is in the Peach State for its law forcing the public to pay for reactor construction in advance.

Look on your Georgia Power bill for Nuclear Construction Cost Recovery Rider, aka Construction Work in Progress (CWIP). It’s probably about 3% of your bill, for power you may never receive.

If you get your electricity from an EMC instead, remember Georgia’s Electric Member Corporations already participate in the existing Plant Vogtle nukes, so you’ll be on the hook one way or another for the new nukes.

When the project fails, or the reactors melt, the public still must pay.

And even before then, Georgia Power customers get to pay for cost overruns. Not to worry; last time nukes were built at Plant Vogtle, they only ran over budget by a factor of seven.

Southern Company’s existing Plant Vogtle reactors had an unexpected shutdown last year days after NRC said they were fine. And Southern Company says

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Austin Energy changed from anti-solar to pro-solar in one year

At the end of 2003, Austin Energy (AE) suddenly went from very anti-solar to very pro-solar.
Formerly coal-smoking Cobb EMC
is doing it right now.
If AE and Cobb EMC can do it, so can Georgia Power: change in one year from opposed to aggressively promoting solar power.

Mike Clark-Madison wrote for the Austin Chronicle 5 December 2003, AE drops a solar bomb,

In a near-complete turnaround from its public position just a week ago, Austin Energy has announced plans to adopt specific, highly ambitious, and undeniably expensive goals for adding solar energy to the Austin electric and economic mix. At a town hall meeting held Tuesday night to discuss the AE plan — also the subject of a public hearing at City Council today (Thursday) — AE’s Roger Duncan announced the utility’s commitment to develop 15 megawatts of solar generating capacity by 2007, escalating to 100 megawatts by 2020. The AE plan also calls for a study of the “comprehensive value” of solar power — putting a dollar amount on the economic and environmental benefits to Austin, in addition to the cost of solar-generated electricity itself. This would determine the price Austin Energy would pay for electricity generated by privately owned solar installations, just as AE now buys wind power from third parties.

Georgians tend to think Georgia Power’s foot-dragging and disinformation campaign about solar is so entrenched it will never change. But I’ve seen it happen, and it happened despite people’s expectations set by the power utility, and it happened very quickly and very big:

Continue reading →

Judge OKs Barnes and Richardson CWIP suit against Georgia Power

Historic Davids get approval for slingshot against power company Goliath.

Judge allows lawsuit over Georgia Power surcharge to go forward,

Fulton Superior Court Judge Ural Glanville’s ruling Thursday allows the lawsuit filed by former Gov. Roy Barnes and ex-Republican House Speaker Glenn Richardson to go forward.

The complaint said Georgia Power has improperly collected sales tax and fees on a surcharge created by a 2009 law. They say it has added up to as much as $100 million in costs to ratepayers.

This lawsuit opposes Georgia Power’s Construction Work in Progress (CWIP) that is already charging gapower customers for the Plant Vogtle nukes that won’t produce any power for years yet. If this lawsuit wins, they may not ever be built.

But you don’t have to wait for this lawsuit, or for the legislature to ban CWIP. You can oppose CWIP by paying for it in a separate check.

Maybe soon we can get rid of Georgia Power’s territoriality law so we can, like we could in 46 other states, generate our own solar or wind power and sell it to whomever we choose.

-jsq