ATLANTA – Georgia Power would be allowed to pass on to customers $2.1 billion of the costs of completing the first of two new nuclear reactors at Plant Vogtle under a stipulation agreement outlined Thursday.

But the Atlanta-based utility wouldn’t be permitted to start recovering those costs until one month after the reactor unit goes into commercial operation, next June under the current completion schedule.

“Neither party to the stipulation received everything it wanted, but instead what staff believes is a fair and just compromise,” Steven Roetger, an analyst with the Georgia Public Service Commission’s (PSC) Public Interest Advocacy (PIA) Staff, told commissioners during a hearing on the agreement.

The PSC voted in August to stop approving incremental cost increases incurred at the long-delayed, over-budget nuclear expansion at the plant south of Augusta. Instead, commissioners have opted to postpone deciding how much of the cost overruns Georgia Power customers will have to bear until after Unit 3, the first of the two new reactors, is completed.

The project, originally projected to cost $14 billion, has ballooned to at least $26 billion.

At the same time, the completion dates have been postponed from 2016 for the first unit and 2017 for the second until 2022 and 2023, due in part to the bankruptcy of prime contractor Westinghouse and, more recently, to workforce shortages arising from the coronavirus pandemic.

Representatives of Georgia Power and the PIA Staff signed off on the stipulation agreement on Wednesday.

Under a key provision in the agreement, Georgia Power will not be allowed to pass on to customers any of the nearly $1.5 billion guarantee Japan-based Toshiba – the parent company of Westinghouse – committed to the project until after the commission decides how much of that guarantee has been spent prudently.

The agreement also for the first time gives the PSC the right to review all operating and maintenance expenses associated with Unit 3 following its completion if the reactor is not performing up to expectations.

In that case, Georgia Power would have to prove that any electrical production that falls below the expected 1,102 megawatts of generating capacity was not the result of “unreasonable or imprudent” construction.

“One of the major concerns we had was performance reliability,” Roetger testified Thursday. “We felt it was necessary to provide this commission an opportunity to review … all of the costs.”

During cross-examination of Roetger and two Georgia Power executives, lawyers for big industrial customers and environmental and consumer advocacy groups complained the agreement would let Georgia Power raise customer rates following the completion of Unit 3 next summer at the same time the utility already is scheduled to file its next regular rate case with the PSC.

“Predictability in budgeting … can be essential for businesses trying to navigate a challenging economy,” said Clay Jones, a lawyer representing the Georgia Association of Manufacturers.

Residential customers under the stipulation agreement would see a net increase of $3.78 a month starting next July, based on the typical usage of 1,000 kilowatt-hours of electricity.

Liz Coyle, executive director of the consumer advocacy group Georgia Watch, said that’s too much to pay beginning just one month after Unit 3 goes into commercial operation when there’s no guarantee the new reactor will perform properly. She cited an example where an AP1000 reactor in China – the same technology Plant Vogtle is using – did not perform reliably for a year.

“Many Georgians, especially those living on fixed incomes, are already having difficulty paying their power bills,” Coyle said. “Even $4 more a month can be problematic in terms of making ends meet.”

Roetger said the agreement strikes a necessary balance between the interests of customers and Georgia Power.

“I understand there are people who are struggling,” he said. “But we have to look at the entire state … and make sure we have a utility that can provide safe and reliable power and is financially sound.”

The commission is scheduled to vote on the agreement Nov. 2.

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.