The company announced last week that the project to add two nuclear reactors to the generating plant near Waynesboro was $737 million over the $6.11 billion budget. That news came after the initial hearing on House Bill 267 in the Utilities Subcommittee.
The bill’s sponsor, Rep. Jeff Chapman, R-Brunswick, said he thought his bill was ahead of the issue because he didn’t expect to the company to disclose it was over budget by hundreds of millions of dollars until next year.
Chapman said allowing the company to make its usual 11 percent rate of return on the overruns gives it reason to be wasteful.
“Georgia Power has a serious incentive to pull as many dollars out of ratepayers’ pockets as possible because they have shareholders,” he said.
Company officials countered that passage of the bill would trigger higher electricity prices because otherwise investors would find Georgia Power unattractive if Plant Vogtle is too risky. The Public Service Commission can rule the company can’t charge its customers for any expenses it considers “clearly imprudent,” but investors have accepted that much risk as a way to protect the public, according to Georgia Power attorney Kevin Greene.
But, he said, investors still expect to get an 11 percent return on any expenses added to the budget for safety reasons, such as increased training demands and heightened cyber-security requirements, and that changing the expected profit now would spook them.
“If you tell investors they can’t get that, it will send shockwaves throughout Wall Street,” he said. “… We’re going to have to raise our prices somewhere else to be able to interest these investors.”
The bill had the support of a diverse group that included liberal-leaning consumer-advocacy groups like Georgia Watch and ultra conservatives like Tea Party Patriots.