Georgia Power increasing rates due to Plant Vogtle
Published 10:00 am Saturday, August 5, 2023
Seven years late and $17 billion over budget, Unit 3 at Plant Vogtle has begun reliably producing carbon-free power to the electric grid. For Georgia Power customers around the state, it also comes with a hefty price tag, but what does it mean for customers in Troup County?
The new nuclear reactor is the first from-scratch nuclear reactor built in the U.S. in decades. Georgia Power announced Monday that testing has been completed and Unit 3 has begun commercial operation.
At its full output, the new reactor can produce 1,100 megawatts of electricity, enough to power a half-million homes and businesses.
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Unit 4 is also on its way to completion and is expected to enter commercial operation by March 2024.
When construction began in 2009, the third reactor was expected to begin generating power in 2016. Both reactors were originally expected to cost $14 billion but are currently on track to cost at least $35 billion overall.
In Georgia, almost every electric customer will pay for Vogtle. Georgia Power owns the lion’s share of the reactors at 45.7% and in turn, the biggest portion of the debt.
Smaller shares are owned by other power companies and by cities through the Municipal Electric Authority of Georgia (MEAG), which includes LaGrange.
Georgia Power’s residential customers are projected to pay more than $926 each as part of financing charges. Elected public service commissioners have approved a monthly rate increase of more than $4 a month for residential customers as soon as the third unit begins generating power.
For the City of LaGrange, which finances city operations using utility sales, the new reactor isn’t expected to change electric rates at all.
LaGrange Utilities Director Patrick Bowie said the city will have some debt to pay off for the plant, but it will be counteracted by other debt going off the books.
“We do have additional debt service associated with Plant Vogtle, just like every other utility that’s involved in the project, but we are also paying off the debt on our older generating plants, so as the debt service on Plant Vogtle units is going up, that service on the older plants is going down. It can kind of offset a little,” Bowie said.
Bowie said he projects that the city’s power generation costs will drop over the next decade.
“We’re getting a lot more cheap energy. Even though Vogtle is very expensive, the energy coming out of the out of the plant is very inexpensive,” he said. “All-in-all, our total cost of service does not change much at all.”
Bowie explained that the city has been paying on the Vogtle debt before the units came online, but Georgia Power was unable to do so because of the way their rates work.
“They can’t file for a rate increase until the plant is actually in service. Whereas the cities and municipalities and EMCs, we’ve been paying for parts of Votgle through the years already,” Bowie said.
Similarly, West Point County Manager Ed Moon said he doesn’t expect the need for a rate increase to pay for Vogtle.
“From looking at our budget, we feel pretty confident that we can manage the cost of it,” Moon said. “Right now, we’re not planning any rate increase to cover the cost of the Plant Vogtle project.”
Moon said that West Point owns about 4 megawatts from the plant, a relatively small percent of the power the plant produces.
They will have access to 2 megawatts for local customers and the other half is being sold to other providers.
Diverse Power said it does not expect any significant rate changes due to Vogtle.
“Based on our estimates, it is anticipated that Diverse Power’s retail rates will remain approximately where they are,” Diverse Power President/CEO Wayne Livingston said.
The plant is expected to provide Diverse Power consumers with clean energy for the next 60 to 80 years, the company said in a press release.
“[Diverse Power] serves our members with a diverse portfolio of safe, reliable, cost-effective and environmentally responsible power, and nuclear has become increasingly important in the transition to a cleaner energy future,” Livingston said.
“Nuclear is also considered one of the most reliable energy sources. With this new unit online and operating safely, I am proud that DPI homes and businesses will be powered by reliable, emission-free nuclear energy for decades to come.”
Hogansville City Manager Lisa Kelly said Hogansville is not anticipating having to increase rates due to Unit 3 coming online.
“It will not necessarily affect the rate that we pay for power supply, as we’re swapping one for the other,” Kelly said. “When we do our rate studies —we do those consistently across the board for gas, water, electric and sewer— we’ll look at those every year just like normal, but at this point, there’s no discussion of raising any rates.”
Kelly said Hogansville owns a tiny percent of Vogtle’s energy production, which will fill in for other sources, including the hydro generation that the city dropped a few years ago.
“Just like everybody across the nation and across the whole world, as we look for ways to generate power emissions-free, this is a huge step in that,” Kelly said.