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Tight PSC races imperil Georgia Power's reliable regulatory support

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Tight PSC races imperil Georgia Power's reliable regulatory support

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A view inside the under-construction Vogtle unit 3. The nuclear project is years behind schedule and billions over budget.
Source: Georgia Power Co.

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Two incumbent Republicans are defending seats on the Georgia Public Service Commission this November, putting Georgia Power Co.'s steadfast regulatory support up in the air as Democratic hopefuls pledge to take a more skeptical approach to the company if elected.

The PSC elections come on the heels of Georgia Power announcing another multibillion-dollar cost increase at its troubled Vogtle nuclear plant expansion. Rising awareness of the issue, local education and mobilization of voters, and national political sentiment are converging to create a more uncertain environment for the utility and injecting a jolt of urgency in what is traditionally a sleepy contest for an overlooked position.

If either of the Democratic challengers — one a former Deloitte consultant and solar entrepreneur, the other an environmentalist and consumer advocate — win, it is unclear how much pressure they would put on Georgia Power, a Southern Co. subsidiary with tremendous economic clout and political backing from the governor and state legislature.

Regardless of who comes out on top, the PSC will continue to shape the future of the American nuclear industry, with Vogtle representing the only active project of its kind in the United States after a sister effort in South Carolina was scrapped in 2017.

A Democrat has not served on the five-seat commission since 2007, and Georgia Power enjoys a stable regulatory regime under Republican commissioners. But Democrats have come close, forcing runoffs twice in the past 12 years, most recently in 2008.

The other instance was in 2006, when incumbent Democrat David Burgess beat GOP opponent Chuck Eaton 48.8% to 46.3%, a difference of nearly 53,000 votes. Because neither man exceeded the simple-majority threshold, voters went to the polls again a month later, electing Eaton.

'Colossal mess'

Eaton is now competing for a third term, having avoided another runoff in 2012. His current Democratic challenger, Lindy Miller, is a former executive at Deloitte who went on to found an Atlanta-based solar provider. Miller presents herself as a nonpartisan fact-finder wanting to bring all sides together.

"The utilities are, probably outside of consumers, the most important stakeholder," Miller said in an interview. "Without the utilities, we wouldn't sit in the comfort of our homes and have the base of economic development, that foundation that we need. So I am very practical, and I hope thoughtful, when it comes to approaching all of the stakeholders."

Miller emphasized, however, that she would not act as a blank check for Georgia Power, especially regarding Vogtle. The PSC is scheduled to vote in February 2019 on whether to approve the utility's most recent spending at the nuclear venture and later in 2019 will begin hearing Georgia Power's request to update customer rates, along with evaluating its 20-year integrated resource plan.

"Vogtle is now one of the most expensive infrastructure projects in the history of the country, and Chuck Eaton was chairman when the project began [in 2009], and failed utterly to put in place any meaningful incentives," Miller said. "In my experience in the business world, the folks who are accountable for a colossal mess like this would've been fired."

Miller's campaign has passed $1 million in fundraising from small donors, and published results from Public Policy Polling showing her trailing Eaton by 1% among voters. A new commercial, titled "Fed Up," is airing on broadcast television stations, and Miller is hosting an Oct. 25 fundraiser with donation options up to $1,000.

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Republican Chuck Eaton and Democrat Lindy Miller.
Source: Georgia Public Broadcasting

At an Oct. 2 debate, Miller asked Eaton why he should be re-elected. He did not directly defend Vogtle, instead responding by saying Georgia's electric rates are 15% below the national average, and that the average bill has not increased over the last seven years.

While Georgia's kilowatt-hour rate may be lower than other states, the U.S. Energy Information Administration found in 2016 that Georgia's average monthly bill is third-highest in the southeast United States. Miller has cited a 2018 study by WalletHub, which says the Peach State has the third-highest monthly bill in the U.S.

Eaton and the other GOP incumbent up for re-election, Tricia Pridemore, both say Georgia does not benefit as much from coastal breezes as states like Florida, hence Georgia's higher bills for air conditioning. Eaton, who could not be reached for an interview, said in the debate that he has promoted a diverse energy mix during his time on the PSC, including nuclear power, which would grow when Vogtle's new reactors come online in late 2022.

'Fuzzy math'

Pridemore, appointed to the PSC in February by Gov. Nathan Deal, has touted her membership on a natural gas advisory panel organized by the U.S. Energy Department and the National Association of Regulatory Utility Commissioners. "I support President [Donald] Trump's energy agenda and the work that Secretary [Rick] Perry is doing," she said in an interview.

While she would not speak to comments made by her predecessor — former PSC Chairman Stan Wise said earlier this year that he "wouldn't bet my house" on Vogtle being completed by its current deadline — Pridemore said she is a careful observer of the venture: "I don't know of any issue in state government where an elected official ... looks at the details of any one project as closely."

The commission votes every six months on Georgia Power's Vogtle expenses. Pridemore said her oversight ends there and does not include a recently renegotiated agreement among the project's owners that shifted more risk to the regulated Georgia Power. "I don't get into the business of the partners," Pridemore said, though she is supportive of their new pact.

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Republican Tricia Pridemore and Democrat Dawn Randolph.
Source: Georgia Public Broadcasting

Vogtle, which is years behind schedule and billions of dollars over budget, is often viewed as a catch-22: continuing construction is likely to bring more cost overruns, but abandoning the venture altogether would trigger financial and legal consequences.

"Everybody wants this cut and dry answer: complete or not complete?" Democrat Dawn Randolph, the candidate challenging Pridemore, said in an interview. "The question is, how did we get here? And how do we 'hire' the right people to never get in this position again?"

Randolph, a longtime advocate on various social issues who previously worked for then-U.S. Sen. Sam Nunn of Georgia, is not opposed to the project but is critical of Vogtle's current status.

"We don't have a PSC right now that's holding people's feet to the fire and having accountability," she said. "I'm concerned that we have a lot of fuzzy math out there."

Vogtle aside, Randolph and Miller both would like to see Georgia Power deploy more renewables and energy-efficiency measures in its next long-term plan. Pridemore said she wants more consumer education programs from the utility.

'So complicated'

The PSC races are likely to draw higher-than-normal turnout, due both to Vogtle and to citizens looking to support or oppose Trump's policies who then cast votes in down-ballot contests. Georgia's gubernatorial election is considered a toss-up, which should spur voters to the polls on Nov. 6.

"This is just a hunch, but if I were a Public Service Commission candidate this year ... I'd feel like I'd drawn the short straw," University of Georgia political science professor Jamie Monogan said in an interview.

"Now is that enough to make the race seriously competitive? It's hard to say; maybe not. Georgia is, at least for now, still a right-leaning state," he continued. "The partisan label is still probably enough to carry the day for something like Public Service Commission in a year like 2018. It probably will be a little more competitive than it might be in some other years."

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The under-construction Vogtle unit 3 in Waynesboro, Ga.
Source: Georgia Power Co.

Allies of the Democratic candidates hope to put them over the top. The Sierra Club's Georgia chapter has identified 115,000 environmental voters who don't normally show up in midterm years and is targeting them to get out the vote, state director Ted Terry said in an interview. Georgia Conservation Voters and the Southern Alliance for Clean Energy are also engaged in voter education efforts.

"This is probably our biggest political year ever," Terry said.

Georgia Power is contributing to the public discourse as well, placing a full-page ad in The Atlanta Journal-Constitution in support of Vogtle days before the utility and its partners voted in September to keep building the reactors despite a $2.3 billion cost increase.

Terry said he has seen polling that suggests the top negative issue against GOP incumbents is their receipt of campaign contributions from people or companies associated with PSC-regulated entities like Georgia Power. A report published in May by the left-leaning Energy and Policy Institute asserted that Pridemore and Eaton have received significant campaign contributions from people or companies with ties to Southern and other PSC-regulated entities.

Pridemore and Eaton have both dismissed the findings, while Miller has seized on the issue. "There are very clear vested interests in these seats," she said.

Eaton during the debate accused Miller and her solar company of standing to benefit from PSC decisions, but she has promised to completely divest herself from the business if elected.

"What you're seeing from both sides, Democrats and Republicans, is 'We're going to be monitors [of Vogtle]; we're going to be the watchdog.' But I don't think you're seeing anyone, Dawn or Lindy, saying 'We're going to shut this thing down right away.' I think that's telling," Terry said. "It's a political issue, but it's so complicated that you can't just have a slogan on it."

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