The dream of Vogtle: now a never-ending nightmare
After being approved for construction in 2009, engineers got to work on the new Plant Vogtle reactors and had ambitious designs. Unit three was slated for completion in 2016, reactor four in 2017; combined, they would supposedly cost $14 billion. While far from cheap, these units were billed as an investment in Georgia’s future—providing clean power for generations to come.
Unfortunately, many of these lofty promises proved to be a fantasy: near-constant delays and massive costs marred the project and will ultimately harm consumers. By 2018, the project’s completion was nowhere in sight, and the total price tag had swelled by an additional $13 billion. Even so, construction continued—but just days ago, Georgians received more troubling news about the Plant Vogtle project.
The Wall Street Journal reported that “an engineering expert working for the Georgia Public Service Commission testified that the startup of the Alvin W. Vogtle Electric Generating Plant would likely be delayed until the summer of 2022 and could cost $2 billion more than expected.” If accurate, this would put Unit three about 6 years behind schedule and the total project would cost around $30 billion—much of which will ultimately be passed onto consumers in the form of hefty electric bills.
While nuclear power has many merits, the Plant Vogtle expansion appears to be an incredibly poor business decision and is largely a byproduct of the outdated method by which the state regulates electric companies. This paradigm leaves consumers with little recourse; they’re captive to electric companies. That’s because Georgia perpetuates a model that prohibits competition among electricity providers. Instead, it grants electric companies regional monopolies in exchange for state regulation.
This combines government bureaucrats’ business acumen—or lack thereof—with the unfair and misguided business decisions normally found in monopolized markets. It is easy to see how this paradigm negatively impacts Georgians.
Without competition, consumers are stuck with whatever power company covers their region. They cannot hold electric providers accountable for their actions, and these businesses don’t need to compete for customers’ loyalties. As a result, the electric utilities don’t necessarily need to keep prices low or tailor their services for their consumers—beyond what government regulators require.
Had Georgia adopted competition within electricity markets, it seems highly unlikely that a project like the one at Plant Vogtle would have gotten off the ground. Nuclear power plant construction is tedious, highly regulated and an enormous investment fraught with dangers.
In fact, over 20 nuclear construction projects have been abandoned in the South since the 1970s, and enormous cost overruns have long been par for the course. Completed in the late 1980s, Units one and two at Vogtle were supposed to cost around $1 billion each. The final cost was closer to $9 billion, and ratepayers were forced to shoulder much of the financial burden. After all, when business costs go up, consumer prices usually do too—and as we’ve seen, it’s not like consumers can just choose to use another provider.
The truth is that few—if any—companies can justify the risks and up-front costs of such a project in a competitive market, and it remains to be seen if they can even do it in today’s monopolized market. In fact, South Carolina, which is also an electric monopoly state, had a similar experience with costly nuclear construction. Yet after pouring years and billions of dollars into the operation, South Carolina was forced to abandon the doomed project in 2017.
Rather than pursuing costly endeavors with a high failure rate, electric companies should be forced to compete with others for business, encouraging more conservative decisions that keep costs down and customers happy.
The Plant Vogtle construction has done neither, and while Georgians have been promised that the project will soon go online, I wouldn’t be surprised if there were further delays and units three and four became even more expensive. Until Georgia chooses competition over regulated monopolies, we can expect more of the same: burdens to Georgians.
