Electric monopolies’ ‘Groundhog Day’ proposal triggers ratepayers

Construction of Plant Vogtle’s reactor units 3 and 4—owned by a conglomerate of power companies, including Georgia Power—has proceeded a bit like the movie Groundhog Day.

Running some $21 billion over budget and around seven years behind schedule, the construction project has been a recurring nightmare marred by interruptions as completion always seemed just out-of-reach. While Unit 3 finally went online last year after constant delays, Georgia is still waiting for Unit 4 to supply the state with power. It isn’t slated to benefit Georgians until later this year, but who knows when it will actually be up and running?

Normally, I wouldn’t grouse as much about the actions of private companies, but because of the Peach State’s regulatory paradigm, electric companies are given a largely unfettered monopoly. No matter where you live in Georgia, you do not have a choice over what electric provider you use. Even worse, the monopolies can build plants and charge customers high rates with impunity so long as government officials OK it, and recent hearings and filings suggest Georgia ratepayers can expect a flurry of concerning activity.

Fresh off of the comedy of errors at Plant Vogtle—much of which ratepayers can look forward to paying off for years to come—electric monopoly Georgia Power issued a stark warning: Current trends suggest that Georgia may have an electricity capacity shortfall by late 2025 unless decisive action is taken. To prevent rolling blackouts, the Peach State needs to scrounge up around 3,400 megawatts of capacity, Georgia Power asserts, which is a curious development.

“As recently as 2022, the company forecast only a modest increase in electricity demand later this decade. But Georgia Power now says it needs more electricity — and fast — to power a wave of large economic development projects heading to the state,” reported the Atlanta Journal Constitution. Part of what is driving demand is a natural evolution. Georgia is growing and humans are becoming more and more reliant on energy-sucking technology, but there may be more to it than this.

The industries flocking to Georgia are poised to guzzle our electricity—industries like electric automobile and battery manufacturers—but supposedly some 80 percent of new demand stems from data centers. These have become big business in Georgia where their footprint is growing. “18 data center campuses are either in development or preparing for sizable expansions across Georgia,” reported the Journal-Constitution.

More electricity demands are, in part, a consequence of Georgia’s success at luring companies here, but is the situation as dire as reports imply? A potential 3,400 megawatt shortfall is massive. It is roughly triple the output of Vogtle’s Unit 3. Time will tell if we do in fact need this much capacity, but for now, at least one group believes otherwise. “There is (demand) growth, yes,” Southern Environmental Law Center’s Jennifer Whitfield told the Journal-Constitution. “But it’s not coming as fast and furious as they’re projecting.”

In the coming weeks, Georgia’s Public Service Commission will invariably parse through the data to determine the severity of the forthcoming electricity shortfall. They will also weigh measures to address it—presumably including a proposal from an electric monopoly. To compensate for future needs, Georgia Power wants to construct 3 new oil and gas combustion units, source some electricity from across state lines and expand their battery storage capabilities.

Regardless of how much capacity Georgia needs in the future, should the construction and ownership of new turbines be handed over to the electric monopolies after the underwhelming experiences at Vogtle? The past is a great indicator of the future, which suggests that operating under the same playbook might produce the same abysmal results: long delays and budget overruns billed to captive ratepayers.

Rather than pursuing this path, which might set the Peach State up for more Groundhog Day moments, Georgia would be wise to consider introducing more competition into the process. These monopolies should face more competition in the construction and ownership of plants, and consumers ought to be given a choice over which provider to patronize.

This would spur innovation, keep companies leaner, promote smarter business decisions and benefit ratepayers in numerous ways—including ensuring lowering electricity bills. Unfortunately, competition might as well be a despicable four-letter word around monopolies. After all, what company would willingly give up control of an entire market?

So long as these companies maintain their monopolies, the government at the very least shouldn’t reward these entities’ foolhardy business decisions by allowing them to recoup their losses off of ratepayers’ backs without consequences. Be this as it may, electric capacity shortages and proposed new construction will almost certainly prove to be controversial topics this year. How this turns out is anyone’s guess. To reference a different movie and quote Jurassic Park, “Hold on to your butts,” because this could be a wild ride.