Tom Fanning, our genial CEO host,
said some things I’ve never heard him say before like
Southern Company is
“pivoting towards wind”
and SO’s board soon has to decide whether to go forward with Plant Vogtle
“or not” probably by August.
Fanning gets the
first and
last word in this blog post,
plus a complete transcript of what
I asked and
Tom Fanning’s response,
along with summaries of the other questions and answers.
Please hear me!
I think renewables are exceedingly important in the future.
— Tom Fanning, CEO, Southern Company
New York, July 17, 2013 — Moody’s Investors Service has confirmed the Aa3 general obligation
rating of Lowndes County School District, GA. The Aa3 rating
affects $34.9 million in outstanding general obligation
bonds. The bonds are secured by the district’s general obligation,
unlimited tax pledge but are expected to be paid from proceeds of a one
percent Special Purpose Local Option Sales Tax (SPLOST). The district
has an additional $10 million in general obligation bonds not rated
by Moody’s.
SUMMARY RATING RATIONALE
The confirmation of the Aa3 rating reflects the district’s sizeable
and growing tax base, SPLOST support of debt service, modest
debt burden, and rapid payout. The rating also incorporates
the district’s below average socioeconomic indicators and recent
trend of General Fund operating deficits. Excluding a slight 1.7%
decline in fiscal year 2011, Lowndes County School District has
consistently experienced growth in the $3.87 million tax
base, which is expected to continue going forward. The base
benefits from the institutional presence offered by Moody Air Force Base,
Valdosta State University (A1/stable), and South Georgia Medical
Center (A2/stable). The current SPLOST is authorized through September
2017 and should provide sufficient revenues to make debt service payments.
In fiscal year 2012, SPLOST revenues were $12.4 million
compared to debt service payments of $12.2 million.
Following fiscal year 2013’s payment of $12.1 million,
the district’s payments will decline to just under $8 million
annually. Amortization is rapid with all debt fully matured by
fiscal year 2018. The district does not have any plans to issue
additional debt.
Solar power is going so well worldwide that Deutsche Bank has just
increased its projections for global demand,
noting that India and Italy have already in 2013 reached grid parity
without subsidies with other sources of energy,
and it expects the rest of the world to follow as early as 2014.
The big winner is rooftop solar.
Is Georgia paying attention?
Buoyed by bullish demand forecasts, and increasing utilization rates
and pricing, Deutsche Bank forecasts a solar market transition from
subsidized to sustainable in 2014. Italy REC solar photovoltaic
plant
The German bank has raised its 2013 global solar demand forecast to
30 GW — representing a 20% year-on-year increase — on
the back of suggestions of strong demand in markets including India,
the U.S., China (around 7 to 10 GW), the U.K. (around 1 to 2 GW),
Germany and Italy (around 2 GW).
Rooftop installations are, in particular, expected to be a main
focus, says Deutsche Bank. A trend for projects being planned with
either “minimal/no incentives” has also been observed, despite the
belief that solar policy outlooks are improving, particularly in the
U.S., China and India, and “other emerging markets”.
Cost already sunk Kewaunee, Calvert Cliffs, Crystal River, and are gnawing
away at San Onofre: now it looks like new owner Duke is not
likely to build Progress Energy's Levy County, Florida reactor.
All that plus even in Georgia, even against all-powerful Georgia Power,
there's a reaction against the cost of the always-later always-more-expensive
new nukes at Plant Vogtle on the Savannah River.
A reaction that's getting written up in the Valdosta Daily Times.
As the cost of building a new nuclear plant soars, there are signs
of buyer's remorse.
The second-guessing from officials in Georgia and Florida is a sign
that maybe the nation is not quite ready for a nuclear renaissance.
On top of construction costs running much higher than expected, the
price of natural gas has plummeted, making it tough for nuclear
plants to compete in the energy market.
In Georgia last week, Southern Co. told regulators it needed to
raise its construction budget for Plant Vogtle in eastern Georgia by
$737 million to $6.85 billion. At about the same time, a Georgia
lawmaker sought to penalize the company for going over budget,
announcing a proposal to cut into Southern Co.'s profits by trimming
some of the money its subsidiary Georgia Power makes.
And Southern Company and Georgia Power slipped the Plant Vogtle schedule
still more,
from 15 to 19 months late.
The legislation has a coalition of tea party, conservative and
consumer advocacy groups behind it, but faces a tough sale in the
Republican-controlled General Assembly. GOP Rep. Jeff Chapman found
just a single co-sponsor, Democratic Rep. Karla Drenner.
As a regulated monopoly, Georgia Power currently earns about 11
percent in profits when it invests its own money into power
projects. Chapman's legislation would reduce those profits if the
nuclear project is over budget, as is the current projection.
In Florida, there's a move to completely
eliminate Construction Work in Progress (CWIP)
such as is being used in Georgia to pre-fund the new Plant Vogtle nukes.
In Florida, lawmakers want to end the practice of utilities
collecting fees from customers before any electricity is produced.
Florida only recently got CWIP, but Progress Energy has been quick to profit by it:
My op-ed in the VDT today; I’ve added links, plus some more after the op-ed.
Finally! Kewaunee, Calvert Cliffs, and now Crystal River
permanently closing say it’s time for Georgia to stop wasting money
on Southern Company’s already over-budget and increasingly-late
nukes and get on with solar power and wind off the coast: for
jobs, for energy independence, and for clean air and plenty of
clean water.
If Lowndes County owed $0 (zero dollars) on the county palace in November 2010,
why are we paying on
$8,965,000 in bonds for it in December 2012?
If that palace was “100% Paid by SPLOST” in 2010,
why in 2012 is the county pledging our property tax dollars to pay those bonds?
In November 2010:
$22,380,000
Judicial Building Cost
$6,728,000
Administrative Building Cost
100%
Paid by SPLOST
$0
Balance Owed
So says a double-page flyer about “the Lowndes County Judicial &
Administrative Complex”
produced by the Valdosta Daily Times for Lowndes
County in 2010 and signed “Highest regards, Joe Pritchard, County Manager”.
There’s no dateline, but it invites the public to a dedication of the Complex
“on Friday, November 12, 2010.”
The Bonds are payable solely from payments to be made by Lowndes County,
Georgia (the “County”) pursuant to an Intergovernmental Contract,
dated as of December 1, 2012 (the “Contract”), between the Issuer
and the County. Under the Contract, the County has agreed to levy and
collect an annual tax on all taxable property located within the County
as may be necessary to produce in each year revenues which are sufficient
to make the payments required by the Contract.
The city of Valdosta was approved for a CWSRF loan of $18,500,000 to
finance phase two of the Mud Creek Water Pollution Control Plant
project, which includes increasing capacity from 3.2 million gallons
per day (GPD) to 5.7 million GPD, and additional improvements and
modifications to the facility. Valdosta will also design a new
solids treatment system. The city of Valdosta will pay 3 percent
interest on the 20-year loan for $18,500,000.
So why is the County of Lowndes having to float bonds?
And are bonds on the commercial
bond market really a better financial deal for the county?
More than a million dollars will be saved by refinancing county bonds,
the Chairman and staff indicated at
yesterday morning’s
Lowndes County Commission Work Session.
Congratulations!
But who is this shadowy Lowndes County Public Facilities Authority
that is responsible for that?
8.i. Refunding Revenue Bonds
County Manager Joe Pritchard said
the county was refinancing two bond packages, for the
Public Facilities Authority
and for the
Central Valdosta Development Authority.
County Attorney Walter Elliott said the
Public Facilities Authority was meeting 4PM tomorrow (now today 11 Dec 2012)
to approve an ordinance similar to what the County Commission was
being asked to approve Tuesday night.
There’s also a purchase agreement with the underwriter,
in the packet only the board gets to see.
Chairman Ashley Paulk said he spoke Friday to somebody named Mr.
Bucky Kensey(?) who wouldn’t tell him a number but said the
bond market had moved in the county’s favor.
The Chairman also said:
I want the public to understand these are not new bonds
these are old bonds that are at a higher interest rate
that are going to be refinanced at a lower rate,
and I believe the last savings was close to a million dollars.
The Chairman indicated Mr. Kensey(?) thought there would be a pleasant
surprise with even more savings than that.
The Commissioners reappointed Antonio Henderson and Harry Sullivan
to the Lowndes County Public Facilities Authority. Their terms will
expire May 31, 2010. Joseph Stevens was appointed, and his term will
expire May 31, 2009.
The primary purpose of the meeting is for the Authority to consider
a Bond Resolution to provide for the issuance of Refunding Revenue
Bonds for the purpose of refunding in part Public Facilities Authority
Revenue Bonds (Lowndes County Water and Sewerage Project), Series 2005,
and Central Valdosta Development Authority Revenue Bonds (Lowndes County
Judicial/Administrative Complex), Series 2003, to authorize and approve
the execution and delivery of an Intergovernmental Contract with Lowndes
County, and related purposes. The meeting will be open to the public in
accordance with the Georgia Open Meetings Act.
NEW YORK, November 15, 2012 —Moody’s Investors Service has
assigned a Aa2 rating and a stable outlook to Lowndes County’s (GA)
$9.1 million Refunding Revenue Bonds (Lowndes County
Judicial/Administration Complex), Series 2012 and $7.2 million
Refunding Revenue Bonds (Lowndes County Water and Sewerage Project),
Series 2013, both issued by the
Lowndes County Public Facilities Authority.
At this time, Moody’s has also affirmed the Aa2 ratings
to $15.5 million of general obligation bonds and $193.7 million of
bonds issued through the Hospital Authority of Valdosta and Lowndes
County, the Valdosta-Lowndes County Industrial Authority, the
Central Valdosta Development Authority and the Lowndes County Public
Facilities Authority…
You know, the county could just tell us all this stuff, so we wouldn’t
have to try to google it.
It is our tax money they are spending, after all.
Refinancing Bonds and the Public Facilities Authority
Work Session, Lowndes County Commission (LCC),
Video by Gretchen Quarterman for Lowndes Area Knowledge Exchange (LAKE), Valdosta, Lowndes County, Georgia, 10 December 2012.
Georgia Power’s parent Southern Company (SO) is bragging about selling a 100 MW biomass plant to Austin Energy. Funny how SO’s press release doesn’t mention Austin Energy’s buyer’s remorse. Let’s see why Austin Energy should regret buying biomass.
Southern Company SO announced today that the nation’s largest biomass plant is putting electricity on the grid in Texas. Southern Company President, Chairman and CEO Thomas A. Fanning joined state and local dignitaries today at the company’s Nacogdoches Generating Facility to mark commercial operation for the 100-megawatt unit.
Austin Energy is receiving energy from the plant through a 20-year power purchase agreement.
The PR goes on about local jobs and taxes, which could have been produced through building solar or wind generation. How much did that biomass plant cost Austin Energy? Funny how that’s not in the PR!
Austin City Council Member Mike Martinez wouldn’t mind a do-over on the $2.3 billion, 20-year energy contract the council approved in 2008.
The contract calls for Austin Energy to buy the entire output from the Nacogdoches Generating Facility, a 100-megawatt wood-waste-fueled biomass power plant.
“When the contract was initially brought to Council, it appeared to be a good deal to help us reach our adopted goals for renewables,” Martinez said.
At Southern Company’s (SO) shareholder meeting, I enumerated some examples in the U.S., Japan, and Germany of nuclear gone bad, and pointed out Japan, Germany, and even Bulgaria had already or were getting out of nuclear, while Southern Company and Georgia continued to bet the farm on nuclear, and I asked what was SO’s exit strategy for when that bad bet goes bad? SO CEO Thomas A. Fanning said they had learned everything there was to learn from Fukushima, and besides Plant Vogtle is 100 miles inland where there are no earthquakes. He didn’t mention the same description applies to Chernobyl. He did say SO planned to make the U.S. nuclear industry the best in the world.
You kept using big bets and then bet the farm. Very interesting terminology.
Regarding operations credibility, a year ago Vogtle Unit 1 shut down 2 days after the NRC gave Vogtle a clean bill of health. But the SO CEO says it’s all better now.
Here’s the video, followed by links to sources for the points I made:
Exit strategy for when this big nuclear bet goes bad? –John S. Quarterman Shareholder Meeting, Southern Company (SO), Callaway Gardens, Pine Mountain, Georgia, 23 May 2012. Video by John S. Quarterman for Lowndes Area Knowledge Exchange (LAKE).
Here are the main points I was reading from, with links:
