Georgia regulators ordered Southern Co. operating unit Georgia Power to show why its profit margin should not be reduced if the proposed addition of two nuclear reactors at its Plant Vogtle site goes over budget.
Regulators were to vote April 5 on a risk-sharing plan recommended by the agency’s staff. According to the Atlanta Business Chronicle, the plan calls for trimming Georgia Power’s profit margin on the project if construction costs rise $300 million or more above the utility’s planned $6.1 billion investment. If the project comes in $300 million or more under budget, Georgia Power would be allowed a higher profit margin.
But in a letter to the PSC dated March 29, an attorney representing Georgia Power argued the risk-sharing plan is illegal because it would penalize the utility for results beyond its control and disallow costs already approved by the commission as prudently incurred.
In a response dated March 30, regulatory commission staff lawyers argued that Georgia law provides “ample authority” for the commission to adopt a risk-sharing plan.
Regulators reportedly voted April 5 to order Georgia Power to defend its position and the staff to file a response to the utility’s argument.
After the two sides have made their arguments, the regulators will hold a hearing and render a decision.
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