Dear Editor:
When PSC commissioner, Lauren McDonald, stated in his published letter (September 19) that Georgia Power profits are capped, what he should have explained is that there is a profit RATE limit, but no ceiling on the total profits accumulated by the company. That distinction is crucially important, especially for Georgia Power residential customers who have suffered 30% higher monthly bills over the past 18 months, yet it seems to have eluded the commissioner.
The incentive of earning a guaranteed rate of return encourages Georgia Power to propose expensive, capital-intensive projects – because the more spent on these projects, the more Georgia Power profits. This arrangement produces woefully unjust, costly, and environmentally reckless results when administered by a PSC whose members have demonstrated greater concern for Georgia Power’s agenda than for their legal obligation to serve the public’s interest by ensuring clean and affordable energy.
As underscored in our collaborative report published earlier this year [Plant Vogtle: The True Cost of Nuclear Power in the United States] Georgia Power was lavishly rewarded for their $20 billion in cost overruns incurred in adding two reactors at Plant Vogtle – with a final project cost 240% over budget!
During the course of that absurdly overpriced project – the most expensive power plant in world history – from 2009 to 2023, Georgia Power amassed a record-breaking $17 billion in profits, even though their mismanagement of the plant expansion accrued $20 billion in cost overruns, much of them passed on to unwary household energy consumers instead of company executives and stockholders. That is quite a handsome reward for bungling a project, which clearly contradicts reasonable returns for a business that is supposed to be regulated by the PSC in service to the public.
It is more than a little ironic that many who support Georgia Power’s exploitative practices, and the PSC’s role in propagating them, claim to be staunch advocates of private enterprise. Yet Plant Vogtle and other monumentally irresponsible projects would never have happened without heavy state subsidies and political favors. A free market would have never allowed a business to deliver a project seven years late and $20 billion over budget without suffering proportional financial or management penalties.
Furthermore, contrary to Commissioner McDonald’s claim, Georgia law does indeed permit Georgia Power to share in the burden of fuel costs, as multiple utility financing experts confirmed during PSC hearings when natural gas costs surged for more than a year following Russia’s invasion of Ukraine. Mr. McDonald is well aware that the White House had nothing to do with spiking gas costs, because that, too, was discussed in the hearings.
It’s also worth noting that in 2016, Southern Company merged with AGL Resources, now operating as Southern Company Gas. Over the past decade, Georgia Power has increased its reliance on gas to generate electricity by a staggering 40%, a shift that has greatly benefited Southern Company Gas financially while harming Georgia Power customers who are paying the billions of dollars in fuel cost surcharges that now boost the profits of Southern Company Gas.
David Kyler, Center for a Sustainable Coast, St. Simons, Georgia