On Friday May 31st Department of Energy Secretary Jennifer Granholm flew to Georgia to attend a ribbon cutting ceremony for Plant Vogtle, the first set of nuclear reactors to be built in the U.S. in nearly 30 years. "We need two hundred of these by 2050. Two down, one hundred and ninety-eight to go," were her first words.
There’s a lot I don’t understand about the world. But how a state that is supposed to protect its people from monopoly utility pricing power would allow Georgia Power to build a $36 billion facility that is 10 time more expensive than equivalent generation, and took 15 years to build, all for just 2200 megawatts of energy, and then celebrate that as a win with federal and state officials in attendance is something I do not understand.
Why did the state of Georgia allow it? Our Public Service Commission (PSC) is charged with ensuring that Georgia Power is financially sound while also ensuring that customers pay just and reasonable rates. These mandates are written into state law. But that’s not what is happening. Instead, as with many utilities across the country, Georgia Power blocks or artificially hinders affordable solutions such as solar, battery storage, and demand management like energy efficiency. A recently published report by the Institute for Self-Reliance titled Upcharge: Hidden Costs of Electric Utility Monopoly Power discusses these issues.
One of the claims made during the ceremony was that Plant Vogtle is now the largest clean energy generating facility in the country. But that implies clean energy is a value we have in Georgia. That can’t be true when the very same month that Plant Vogtle was completed, April, the PSC approved Georgia Power’s request to build three new gas plants to meet data center energy needs, and authorized continuing coal plants that were scheduled for retirement.
These approvals were granted despite intense pushback from the public opposed to expanding fossil fuels, and from prospective Georgia Power customers with clean energy goals. For example, Microsoft protested during PSC hearings that expanding gas and continuing coal to supply their data center energy needs does not meet their carbon free emissions pledge. The U.S. Department of Defense protested that their actual request for clean energy was not represented in Georgia Power’s plan while hypothetical customers without clean energy goals were. Several intervenors pointed out that the data centers driving this massive expansion had not chosen Georgia but were exploring many states, and even if Georgia was chosen there were many affordable clean energy solutions available.
So what’s really going on here? Two things: a broken compensation system for our monopoly utility and a PSC that does not meet its state mandate.
A serious issue is that state of Georgia, like many states, guarantees compensation to Georgia Power for building new generation. In fact, the more expensive the facility the more profits the utility earns. The reverse is not true: utilities are not compensated when they reduce costs, incorporates energy efficiency, or avoid expensive investments. Therefore, Georgia Power and all utilities under this model seeks ways to build more and more generation facilities. They are acting according to the incentive the state sets for them. It is the state of Georgia, North Carolina, and others that is not acting properly by continuing a 20th century model of guaranteeing profits for building things instead of modernizing how our utilities are compensated.
These are serious issues: electricity is an essential service and in Georgia our utility bills are already too high. There is some confusion, pushed by both Georgia Power and the PSC that Georgians pay low electricity rates, but rates make up only about half a Georgia Power bill. Once tariffs, surcharges and service fees are added Georgians pay the 5th highest electricity bills in the nation.
Our summers are brutally hot here and people can die from lack of air conditioning, or even a fan, when they lose access to electricity from inability to pay high bills. Renters can be evicted and parents can lose custody of their children if they don’t have electricity. Protecting Georgians by keeping electricity bills among the lowest in the nation to match our otherwise low-cost living should be the PSC’s priority. Yet time and time again Georgia's Commissioners do not choose the lowest cost option, which is why Georgians pay such high bills.
The question we must ask ourselves is has the regulated for-profit monopoly utility model stopped working for our country? Our state commissioners are not operating as a check on monopoly power as intended. We have an outdated system that prioritizes profits over affordability and clean energy. There are numerous essays written by well respected energy professionals that our utilities are hindering the energy transition using AI data center growth as a cover for building more generation, including one titled, "We Can Get the Electricity We Need Without Frying the Planet" published in the New York Times. We need our utilities to be partners, and they aren't - in large part because of this flawed compensation system.
It is time to move away from a guaranteed-profit model and adopt one that incentivizes clean energy, low costs, a competitive business market, and consumer engagement. If we don't do that, and quickly, the planet will experience the worst of what a destabilized climate will do.
Don't believe the calls for nuclear energy as the only solution to solve these issues. Nuclear is too expensive and too slow, and is a distraction from the work we need to do to accelerate the clean energy solution. Six Georgia organizations came together to write a report called Plant Vogtle: The true cost of nuclear power in the United States that documents Vogtle's impact on Georgians, including what happened and why. It is an important read for anyone interested in regulatory governing failures and nuclear energy and offers a counter narrative that Vogtle is a success.
We all deserve affordable, clean electricity. Let’s work together to ensure that Georgia, and all states, have a 21st-century energy plan that is affordable, clean, and accelerates the energy transition, not stalls it. For that, we need to get monopoly utilities out of the way.