The failed EDF nuke project at Calvert Cliffs in Maryland makes it clearer why Southern Company (SO) was the first company to get a nuclear permit in 30 years: it was the only one big enough and monopolistic enough to pull it off. Even then it’s such a bet-the-farm risk that even “great, big company” SO only dared to deploy its “great big huge scale“ equipment with the regulatory capture triple-whammy of a stealth tax on Georgia Power bills, PSC approval of cost overruns, and an $8.33 billion federal loan guarantee:
- a legislated stealth tax in the form of a rate hike on Georgia Power customers for power they won’t get for years if ever. If you’re a Georgia Power customer, look on your bill for Nuclear Construct Cost Recovery Rider. You’ll find it adds about 5% on top of your Current Service Subtotal. Georgia is one of only a handful of states where such a Construction Work in Progress (CWIP) charge is legal thanks to our regulatory-captured legislature. Doubling down on bad energy bets, Southern Company is also trying to use CWIP to build a coal plant in Mississippi.
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A captive Public Service Commission that
rubber-stamps costs for Plant Vogtle.
In case there was any doubt as to the PSC’s role in legitimizing those new nukes,
the very next day Fitch reaffirmed Southern Company’s bond ratings.
Southern Company’s regulated utility subsidiaries derive predictable cash flows from low-risk utility businesses, enjoy relatively favorable regulatory framework in their service territories, and exhibit limited commodity price risks due to the ability to recover fuel and purchased power through separate cost trackers.
- An $8.33 billion federal loan guarantee. Even that’s not good enough for SO and Georgia Power: SO is asking for less down payment.
And what if even one of that three-legged regulatory capture stool’s legs went away? Continue reading