You know who’s going to own those nuclear reactors that Georgia Power and other utilities want to build near Augusta?
In a legal sense, the utilities would own them. But in a political sense, state Sen. Don Balfour would own a good piece of them too, at least if Senate Bill 31 becomes law.
Written at the behest of Georgia Power, SB 31 would strip authority from the Public Service Commission, the body created to regulate utilities and make highly technical decisions about how to finance complex multibillion-dollar projects such as nuclear plants. Balfour, the sponsor of the bill, apparently believes that the interests of Georgia would be best served if such technical decisions are made by Waffle House executives, insurance salesmen, retired farmers and others serving in the state Legislature. Such people do have wisdom, of course. It just doesn’t generally extend to the intricacies of utility regulation.
The bill would also require Georgia Power customers to start paying interest and profits to Georgia Power shareholders long before the plants are built, and long before they produce a single kilowatt of electricity. And the bill curtails the ability of the PSC to protect Georgia Power customers in case the cost of the plants should increase substantially beyond current estimates.
By supporting passage of SB 31, Lt. Gov. Casey Cagle and a majority of the state Senate have already joined Balfour in taking political ownership of those plants.
If Georgia Power’s costs —- now estimated at $6.4 billion —- do soar beyond expectations, jacking up electricity rates for Georgia families, Balfour, Cagle and others will get and deserve a good chunk of the blame.
Of course, Georgia Power has reassured legislators and the public that the huge cost overruns of the ’70s will not recur. Yes, they admit, a new nuclear plant being built in Finland is already 50 percent over budget and three years behind schedule, suggesting things haven’t changed much at all.
But they nonetheless argue that the risk of runaway costs is minimal thanks to changes in nuclear technology and regulation.
Yet when asked whether the company is willing to share in that supposedly minimal risk, even in return for potentially higher profit, the answer is a stern “no.” Georgia Power has said it will walk away from the project altogether if its shareholders are required to share in any of the risk of cost overruns.
That should raise a question among members of the House of Representatives, who vote next on SB 31. If they pass it, they too take political ownership of the plants, including the risk of substantial cost overruns. If things go wrong, the voters back home will want to know why they supported a bill that gave Georgia Power all the advantages, and their customers all the risk.
House members ought to ask themselves something else as well. The staff of the PSC has put out a technical assessment of SB 31 and its impact. Among other things, it warns —- stick with me here —- that “even if the Company has overearned on its revenue requirement, the Commission could not use those over-earnings to offset any under-recovery of the finance costs and would still have to allow ratepayers to be charged the full true-up amount.”
Did you follow that?
State legislators ought to read every word of that analysis before voting. If they comprehend it and still believe the bill is a good idea, they can vote with confidence that they are qualified to decide such matters.
However, if talk of overearnings being applied to under-recovery is outside their comfort zone, legislators ought to question the wisdom of substituting their judgment for that of the professionals and full-timers at the PSC. In the immortal words of Dirty Harry Callahan, “A man’s got to know his limitations.”