Tuesday, September 8, 2009

Reactor opponents challenge law funding work

By Walter C. Jones | Morris News Service

Monday, September 07, 2009

ATLANTA --- The question of a controversial law's constitutionality could halt new nuclear reactors in Georgia.

A group opposed to reactors on environmental grounds is using a legal challenge to the financing mechanism granted to Georgia Power during the past legislative session as a way to prevent what it considers to be an ecological mistake.

Senate Bill 31 violates the state and federal constitution on several points, argue lawyers for the Southern Alliance for Clean Energy.

The group, which is based in Tennessee but has members and offices in Georgia, has often spoken out against nuclear power and in favor of solar and wind power. Sara Barczak, of the group's Savannah office, relied on environmental arguments in December when she testified against the plant in front of the Public Service Commission.

"Downstream communities should be concerned about project water consumption at the proposed Vogtle site because consumptive water loss, especially during low river flows, can pose significant negative impacts to water quality and aquatic resources," she said.

She also raised concerns about the environmental impact of dredging the nearby Savannah River to allow reactor components to be shipped by barge, as they were when the first two reactors were built.

The group didn't succeed in convincing the commission, so now it's using a different tactic.

The Southern Alliance's 16-page lawsuit argues that when the legislation granted Georgia Power permission to charge its customers the construction costs before power generation begins, it amounted to a tax that gives the company something for nothing.

"The adoption of the nuclear tariff by the Georgia General Assembly creates an unconstitutional gratuity in favor of Georgia Power and its stockholders, for, among other reasons, paying such stockholders of Georgia Power a return on equity in excess of $1 billion before Units 3 and 4 at Plant Vogtle are even put into service, i.e., for services which have not been rendered," the lawsuit states.

Though Southern Alliance is suing the state and not the utility, Georgia Power filed a brief with Fulton County Superior Court asking for the case to be dismissed.

"We still feel like SB 31 was good for the people of Georgia, and we think it is a win-win," said company spokeswoman Carol Boatright.

The bill was controversial when it was debated in the General Assembly. Consumer groups such as Georgia Watch and AARP joined environmentalists in fighting it. The company and its allies carried the day by arguing that more electric generating capacity was needed and that nuclear was the best source. They said consumers would benefit from paying in advance rather than having interest charges mount.

The company also stressed that having a guaranteed funding stream during construction was necessary to attract investors who would lend the money for the work. That funding guarantee was vital, and many other utilities across the country without a similar guarantee haven't been as aggressive about new reactors, according to William Tucker, author of Terrestrial Energy: How Nuclear Power will lead the Green Revolution and End America's Energy Odyssey .

Winning a judgment against the law could halt the project with more finality than many environmental considerations might. For example, a victory for environmentalists on dredging would merely force the utility to go to the added expense of shipping by rail or truck.

One thing power companies and environmentalists agree on is they don't want to see the history of nuclear power plants repeated.

Neither side wants the long, expensive battles that cost taxpayers and utility customers and still ended in the operation of 104 reactors across the country..

The Nuclear Regulatory Commission has replaced the two-step licensing process used in the 1960s and 1970s that granted one license for construction and a second one for operating. At the time, there were many fights at each stage, with some second-stage skirmishes duplicating issues that had been debated at the first stage. Resolving concerns after the plants were built and awaiting an operating license proved to be costly and time consuming.

Now the NRC will issue one combined construction and operating license in an attempt to contain the fights to one stage.

Tom Kauffman, a spokesman for the Nuclear Energy Institute in Washington, said opposition won't disappear.

"We expect that there will be contentions as new plants enter the application process," he said. "That's as it should be, to allow concerns to be aired."

The Vogtle application is still pending before the NRC, even as basic construction is under way in Waynesboro.

Southern Alliance's lawsuit in Fulton County Superior Court represents a new venue. A critical early decision will be whether the judge grants a restraining order that prohibits Georgia Power from charging its customers until the case is settled.

So far, no hearings have been scheduled or witnesses deposed. And with the likelihood that its outcome will be appealed, its resolution could be slow.

Reach Walter Jones at (404) 589-8424 or walter.jones@morris.com.


An environmental group that wants to stop construction of two nuclear reactors has filed a lawsuit that's not based on ecological arguments. Instead, the Southern Alliance for Clean Energy challenges the constitutionality of a state law that allows Georgia Power to pay for construction by charging its customers before the reactors begin generating power.

The suit says Senate Bill 31 is unconstitutional on six grounds:

- It bypasses the Public Service Commission, which has responsibility in the state constitution for electric utilities.

- The law takes money away from Georgia Power customers and gives them no immediate benefit, an alleged violation of the U.S. Constitution's right to due process.

- By exempting large commercial and industrial customers of Georgia Power, the law discriminates.

- Because customers pay while getting no electricity, the charges amount to an illegal gratuity to Georgia Power.

- A government-ordered fee is essentially a tax, and only governments can benefit from a tax.

- The fee strengthens Georgia Power financially, but because the company is a monopoly, the state can't pass laws that benefit it.

Source: Lawsuit filed by the Southern Alliance for Clean Energy


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