RN-T.com – ANALYSIS Georgia Power can use some mojo

25
Aug

RN-T.com – ANALYSIS Georgia Power can use some mojo

ATLANTA — Recent developments have led political watchers to wonder whether Georgia Power has lost some of its mojo.

The state’s largest electric utility, and its parent Southern Company, no longer seem to get everything they want at the Public Service Commission.

Consider that the commission voted overwhelmingly last month to force more solar generation on Georgia Power when considering the latest edition of the company’s 20-year plan. That was despite the company’s own “advanced solar initiative” last fall, a move most industry observers suspected was designed as a defensive move to pre-empt a solar mandate from the commission.

The solar initiative to install 210 megawatts of generating capacity amounts to the largest voluntary installation of generating capacity from renewable sources of any utility in the country. It wasn’t enough to dissuade the commission from ordering another 525 megawatts.

For years, Georgia Power executives had said in speeches and commission testimony that solar wasn’t practical since 80 percent of the time the sun is blocked by clouds or nightfall.

While the company can appeal commission decisions in court — a path it has taken in the past, it quietly accepted the outcome instead.

Perhaps it was feeling vulnerable because of a couple of huge construction projects that are over budget, one in Georgia and another in Mississippi. The Georgia project is the addition of two nuclear reactors at Plant Vogtle near Waynesboro, the other by sister company Mississippi Power is for a modern coal-burning plant in Kemper County, Miss.

Of course, the Georgia Public Service Commission has nothing to do with the Kemper County plant, but when Mississippi Power, under pressure from regulators in that state, agreed to absorb $611 million of the nearly $1 billion in estimated cost overruns, it opened the door to a similar concession with Georgia’s commission about overruns at Vogtle. The Kemper loss was so painful for the company that it resulted in cutting second quarter earnings by 50 percent from the previous year.

Georgia Power had asked the Georgia commission to raise the budgeted amount for Vogtle by $737 million, which would have effectively meant it was no longer over budget. And the burden of proof would have shifted from the company to justify that $737 million to the commission staff.

Executives essentially withdrew the request, postponing it for consideration at a later date, when Commissioner Tim Echols started a cost-review hearing by asking why Georgia Power isn’t swallowing the overage the way its sister company did in Mississippi.

Political capital will come in handy in the months ahead, whether it comes from customer goodwill or its executives’ campaign contributions. That’s because it will want to fend off three pending legislative proposals.

One, by Rep. Jeff Chapman, R-Brunswick, who is running for Congress, would reduce the company’s profit potential on the new reactors in the case of budget overruns.

Two other bills would eat into the company’s monopoly either by allowing individuals to buy electricity from firms that install rooftop solar panels or by allowing a new utility to be the exclusive solar-power utility.

None of the three bills progressed during this year’s session when the company flexed relatively more political muscle. Things may be different next year.

Besides the legislation, the company still has to convince the commission that its Vogtle overages to date — and any in the future — are legitimate costs its customers should bear.

These tasks will be tougher if politicians sense vulnerability.

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