Georgia Power Customers to Pay $139M Less for Vogtle Expansion in 2018
Wednesday, January 31st, 2018
Georgia Power filed an update for the Nuclear Construction Cost Recovery tariff with the Georgia Public Service Commission indicating customers will pay $139 million less for the Plant Vogtle expansion in 2018. Beginning in April, the typical residential customer using 1,000 kilowatt-hours per month will pay $2.70 less than expected per month in financing costs for the Vogtle project. The savings are due to recent changes in federal tax law, as well as the positive impact of the receipt of the full amount of parent guarantee payments from Toshiba. The company continues to evaluate broader impacts of the changes in federal tax law, which will result in additional customer savings and plans to file a report with the Georgia PSC by Feb. 20.
In addition to the reduction in the NCCR tariff, the Georgia PSC recently approved $188 million, a total of $75 each for individual customers, in bill credits as a direct result of the Toshiba parent guarantee payments. The credits will be distributed across three separate Georgia Power bills in 2018.
The company is also working with the Georgia PSC to determine timing and details for a 2018 refund of $43.6 million the company earned above its allowed earnings range in 2016. As a regulated utility, Georgia Power is allowed to earn a return on equity (ROE) of 10 percent to 12 percent per year. The company works to efficiently manage its business while providing customers with reliable and affordable service and refunds two-thirds of earnings over 12 percent back to customers across the state.
From the beginning of the Vogtle expansion, Georgia Power has worked to pursue all available benefits for customers and minimize the impact of the new units on electric bills. As part of this strategy, the company recovers financing costs for the project in accordance with state law through the NCCR tariff approved by the Georgia PSC. This structure saves customers hundreds of millions of dollars by reducing financing and borrowing costs, while also phasing the plant into rates over time helping to avoid "rate shock" once the new units come online. Today, after including these savings, anticipated customer benefits from federal production tax credits, interest savings from loan guarantees from the DOE and the fuel savings of nuclear energy, the projected peak rate impact to Georgia Power retail customers is well below original projections of approximately 12 percent with 5 percent related to the project already in rates.
Parent guarantees backed by Toshiba as the parent company of Westinghouse, the original contractor for the Vogtle project, were put in place to protect Georgia electric customers at the beginning of construction. Toshiba fulfilled all remaining payments, for a total of $3.68 billion for all of the Vogtle co-owners in December 2017, eliminating a major risk for continuing construction of the nation's only new nuclear units.