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Ratepayers, not shareholders, cop the cost of Georgia’s planned nuclear reactors

[Georgia’s nuclear] 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.

Nuclear project cancellation leaves Georgia standing alone, FACING SOUTH, 11 Oct 10, 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…….…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.”

ISS – Nuclear project cancellation leaves Georgia standing alone

October 12, 2010 - Posted by Christina Macpherson | business and costs, USA | antinuclear, nuclear, nuclear costs, reactors