Archive for the ‘Georgia Power’ Category

Happy New Year: Electric rates for Georgia heading up

Tuesday, December 21st, 2010

By Margaret Newkirk

The Atlanta Journal-Constitution

4:28 p.m. Tuesday, December 21, 2010The typical electric bill for Georgia households will rise by $14 a month starting in January — and another $4 a month by 2013 — under two measures approved Tuesday by state utility regulators.

The state Public Service Commission approved the Georgia Power price hikes by a 4 to 1 vote, with departing commissioner Bobby Baker the lone dissenter.

The company sought part of the increase to pay for spending on electric infrastructure and mandated environmental controls, while the rest will pre-fund work on a nuclear plant expansion. Georgia Power contends that Georgia’s rates remain comparatively low nationally.

Consumer groups blasted Tuesday’s decisions, which will boost the typical household bill by $168 a year starting in 2011, and $216 a year by 2013. They said the commission is shoring up Georgia Power’s profits in a recession.

“This deal was crafted by Georgia Power for Georgia Power,” said Will Phillips, associate state director of AARP Georgia. “It raises customer rates by hundreds of millions of dollars more than is necessary in one of the worst economies in a generation.”

The hikes include a three-year rate increase deal between the company, PSC staff, industry, big retailers and big government power users. It adds $10.76 to a typical household bill next month.

The second immediate increase is the new nuclear construction fee, mandated by the legislature in 2009 and approved by the PSC Tuesday. That adds another $3.73 to the typical bill in January.

Bills will then rise again in 2012 and 2013, adding another $4 to the typical households monthly costs.

The typical bill is calculated at 1,000 kilowatt hours of power use in a month. For customers who use only 1,000 kilowatts of power in the summer — a conservative amount — a monthly bill will rise from $115.64 this past summer to $130 in 2011.

Commissioners who voted for the hike blamed it squarely on mandated environmental spending by Georgia Power, which has had to install equipment to control pollution from burning coal.

“This is one of the most difficult votes I’ve ever had to take,” said Commissioner Chuck Eaton. “I think there’s a big disconnect between environmental concerns and the impact on rates.”

Eaton and commissioners Lauren McDonald and Doug Everett said environmental mandates were responsible for nearly half of the rate hike.

But Baker said half of costs they cited were going to a new gas-fired power plant the company is building in Vinings. The plant will burn more cleanly than a much smaller coal-fired power it replaces. It also will make Georgia Power money, unlike environmental control equipment.

Opponents called the commission’s emphasis on environmental costs a red herring, and said the real issue in the rate case was the size of the company’s allowed rate of return.

In approving the deal, the PSC gave Georgia Power an allowed return on its investments of 11.15 percent, slightly lower than it had been. The commission also allowed the company to keep all profits in excess of that up to 12.25 percent, the same deal the company has had for the past three years.

Casting his final vote as a PSC member, Baker aid he couldn’t support the allowed profit: “Everybody in this room has been impacted by the recession. We’ve had record foreclosures. Business bankruptcies are the highest in Georgia history.”

The deal also changed the rules under which Georgia Power and its regulators have reached three year deals in the past. Previous deals gave the utility a higher rate of return in exchange for taking the risk of a three-year rate freeze.

Tuesday’s deal eliminates the freeze, letting the utility come back for more money if its profits fall too low.

In October, the PSC approved a separate rate hike for Atlanta Gas Light, which supplies natural gas retailers in Georgia. That hike is about $1 on a typical bill.

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Nuke project cancellation leaves Georgia alone

Friday, October 22nd, 2010
from Facing South Magazine

Apparently even billions of dollars in loan guarantees from the federal government are not enough to help the nuclear industry overcome the financial risks of building new reactors.

On Friday, Constellation Energy announced that it was withdrawing from a proposal to build a new reactor at its Calvert Cliffs plant in Maryland — despite the fact that the Obama administration had awarded the project $7.5 billion in taxpayer-backed loan guarantees.

The Baltimore-based company said it informed the U.S. Department of Energy that it couldn’t move forward with the loan guarantee process “because the proposed terms and conditions are unworkable.” It called the cost of the loan guarantee as calculated by the White House Office of Management and Budget  “unreasonably burdensome” and said it “would create unacceptable risks and costs for our company.”

“We are deeply disappointed that the loan guarantee process did not play out as we had hoped,” Constellation said.

A senior Obama administration official told the Washington Post that while they wanted to see the nuclear industry “go forward,” they also have “a duty to protect the taxpayers’ money”:

Sources familiar with the negotiations over the loan guarantee say that [OMB] initially calculated that the credit subsidy for Calvert Cliffs was nearly 12 percent, requiring Constellation to put up $880 million. OMB later said that the Constellation venture could lower the subsidy rate to around 5 percent by agreeing to self-insure the project, buy up to 75 percent of the reactor’s power and put up an additional $300 million.

Constellation and the French company Électricité de France are partners in UniStar, the joint venture behind the Calvert Cliffs project. UniStar has not withdrawn the loan guarantee application; Constellation said the matter would have to be taken up by UniStar’s board of directors.

This means that the only nuclear project that’s moving ahead with federal loan guarantees at the moment is Southern Company’s Georgia Power subsidiary’s initiative to build two new reactors at Plant Vogtle near Waynesboro, Ga.

But that project is receiving other assistance that was not available to the Calvert Cliffs project: Construction Work in Progress financing, or CWIP. This is a scheme that allows Southern Company/Georgia Power to begin charging ratepayers for the reactors even before they’re built. Maryland law does not allow CWIP.

Last year, Georgia Power wielded its considerable political clout to get the state legislature to approve CWIP, though as part of that deal large industrial users were exempted from those rate increases. At the time CWIP was under consideration, residential ratepayers were told that they would pay an extra $1.30 per month starting in 2011. But last month, the investor-owned company filed plans with the state Public Service Commission that would more than double the initial fee to $3.73. That fee would climb to $9 over the next four years.

Those increases come on top of a requested basic rate increase that’s expected to add $18 per month to the typical household power bill. At the same time, Georgia Power is proposing a new arrangement in which two-thirds of its annual losses could be offset by imposing higher rates on customers — without having to file a formal rate case with the PSC.

“It’s clearly an attempt to shift the financial burden from shareholders to ratepayers,” says Angela Speir Phelps, executive director of the consumer advocacy group Georgia Watch and a former PSC member. “It’s an unprecedented move and would eliminate an established review process for rate increases.”

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Georgia Power nuke fee higher on front end

Friday, October 22nd, 2010
Atlanta Business News 6:02 p.m. Friday, September 3, 2010

By Margaret Newkirk

The Atlanta Journal-Constitution

The nuclear power expansion fee that will show up on Georgia Power bills in January will be bigger than the utility indicated when lobbying for the levy, according to plans filed Friday.

Georgia Power said the initial fee will add $3.73 to the typical monthly residential bill in 2011 — more than double the $1.30 figure the company and its supporters used when it convinced the state legislature to allow the fee.

In the Public Service Commission filing, Georgia Power also said the fee will ratchet up to $9 over the following four years, rather than six as it had suggested last year.

However, the total amount collected through the fee to help pay for two new reactors will remain unchanged, Georgia Power said. It’s the initial amount and pace of the increases that differs from the company’s previous indications.

Company spokeswoman Christy Ihrig said the faster time line more accurately reflects when the company believes it will incur costs on its Plant Vogtle reactor project.

Fee opponents said the public was tricked.

“It’s the old bait and switch,” said Angela Speir, executive director of Georgia Watch and a former PSC member. “Georgia Power told legislators it would be one thing, but when ratepayers get their bill, it’s something else.”

AARP spokesman Will Phillips also criticized the change.

“Georgia Power sold the legislature (on the fee) as a way to help customers avoid rate shock,” he said. “And now, in this economy, the increase they propose to give to customers in January 2011 is more than twice what they estimated.”

“After Georgians all across the state have been voicing their concerns about this and other rate increases, we wonder if Georgia Power is even listening,” Phillips said.

After the $3.73 addition to a typical bill next year, the fee will add another $1.44 in 2012, $1.50 in 2013, $1.22 in 2014 and 82 cents in 2015, according to Georgia Power, with the additions cumulative.

When seeking approval for the fee, it had used figures that called for the fee to increase roughly $1.30 per year for seven years.

The new fees will come on top of whatever basic rate increase Georgia Power wins from state utility regulators later this year. The company has asked for more than $1 billion in increases, phased in over 26 months beginning in January. The proposed rate increases would add $18 per month to the typical household bill.

Georgia Power’s nuclear fee is intended to pay about $1.6 billion in financing costs for constructing two reactors at its Vogtle nuclear plant near Augusta. They are scheduled to be complete in 2016 and 2017 and are on pace to become the nation’s first new reactors in decades.

The reactors will cost an estimated $14 billion total, of which Georgia Power customers will pay a little less than half: Co-op and municipal power customers will pay for the rest.

Under state law and utility regulatory policy, power customers don’t typically pay for new generation facilities until the plants produce power. But in 2009, Georgia Power convinced the legislature to pass Senate Bill 31, which changed that for  nuclear reactors.

SB 31 was one of the most intensely lobbied measures in years. Company lobbyists and the bill’s sponsors all used the $1.30 per month initial increase figure to sell it.

The company said the early collection would reduce rate shock and shave the reactors’ final cost to ratepayers by about $300 million.

Georgia Watch, AARP, radio consumer advocate Clark Howard and conservative blogs like Peach Pundit and Political Vine all opposed SB 31, saying it  shifted risk to ratepayers and forced some consumers to pay for plants they will never use.

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