Nuclear expansion cost overruns overshadow elections
SANDY SPRINGS, Ga., Nov. 5, 2012 /PRNewswire-iReach/ -- Maybe I'm crazy but, I would never prepay the mortgage on a home before I could live in it, especially without knowing how much the principal balance was or how many years I was going to have to pay.
As consumers, we expect accountability when it comes to our hard earned money being spent by others. We like to get what we pay for.
Too bad right now we are paying for two new nuclear reactors before they are operational, and we have no way of knowing when they will be functional and how much the final bill will be.
The Georgia Public Service Commission is responsible for upholding this very accountability when it comes to our utility bills, but the current elected officials are failing us in this regard.
The Plant Vogtle expansion is the nation's first new nuclear power project in more than three decades, but more importantly it is the $14 billion project we never asked for and are shouldering all the risk for.
I'm not saying nuclear power is terrible, but the thing many folks don't realize however, is most plants are built in a deregulated market, but the utility conglomerates' Plant Vogtle is being built in a regulated market, meaning capital investment costs are much higher because companies have to recover their investment as they go.
By the end of 2012 we will have paid about $500 million for this project, equalling out to roughly $100 additional a year in our bills, that's not including the questionable sales taxes and fees calculated into the Vogtle charges –– something former Gov. Roy Barnes is suing over.
To top things off, the current PSC has refused to approve risk sharing, which sets conditions ensuring investors are guaranteed a profit while consumers assume all the risk for cost overruns.
Nuclear power plants are notorious for going billions of dollars over budget. When Vogtle was originally started in the 1980's construction costs went massively over initial projections, nearly bankrupting companies involved.
Three years ago with the expansion project was first proposed, cost estimates were around $6.4 billion –– now we are at $14 billion with looming multi billion dollar cost overruns on the horizon. See a trend?
Georgians are getting the raw end of this deal, but that doesn't mean we can't change it.
As always, the root of our problems boils down to inadequate representation at the PSC. Incumbent Commissioner Chuck Eaton voted twice against risk sharing, shifting the burden of projected $900 million cost overruns to ratepayers –– socializing the risk for consumers and privatizing the profits for Wall-Street shareholders.
Consumer advocates and lawyers familiar with the case have even speculated that Georgia Power is preparing to file a $2 billion cost overrun to the PSC for approval, but not until Nov. 7 –– the day after the election, shielding the incumbents from making unfavorable decisions that could factor into the public's vote.
This Wall Street-esque bailout for utility conglomerates also means any incentive to avoid cost overruns is virtually nonexistent.
Don't take my word for it though, just ask former Republican Public Service Commissioner Bobby Baker, who says risk sharing can be implemented at any time.
The unfair burden consumers are shouldering could be lifted tomorrow –– all it would take is for one commissioner to make a motion.
My first act as commissioner would be to move for this very change, because we need to stop worrying about Wall Street investors and start talking about the needs of Georgia families and small business owners.
SOURCE Friends of Steve Oppenheimer