Georgia PSC approves plan to deliver additional $1.2 billion in new benefits due to Tax Cuts and Jobs Act
ATLANTA, April 3, 2018 /PRNewswire/ -- The first of three $25 credits for the Vogtle nuclear expansion will be applied to Georgia Power customers' bills beginning this month. $75 in total 2018 bill credits, or $188 million overall, were approved by the Georgia Public Service Commission (PSC) as part of its order to continue construction of Vogtle 3 & 4 in December 2017. The credits are a direct result of parent guarantee payments for the project from Toshiba available due to the strength of the original contract for the project and protections in place for Georgia electric customers.
Additionally, the Georgia PSC today approved a plan to deliver $1.2 billion in customer benefits due to the Tax Cuts and Jobs Act. The benefits were confirmed in March as part of an agreement with Georgia PSC Staff and include approximately $130 million in reduced taxes on financing costs for the Vogtle nuclear expansion; $330 million in direct credits to customers as a result of lower federal income tax rates over the next two years and approximately $700 million in future benefits to be addressed in the company's next base rate case in 2019. Under the plan, the typical residential customer using an average of 1,000 kilowatt-hours per month could receive approximately $70 in refunds over the two-year period.
From the beginning of the Vogtle expansion, Georgia Power has worked with the Georgia PSC to pursue all available benefits for customers and minimize the impact of the new units on electric bills. In addition to the 2018 bill credits, the company recently announced a lower projected rate impact for customers of 9.8 percent with more than half of this impact already in place on bills. This projected rate impact is well below original projections of approximately 12 percent thanks to new federal tax laws, anticipated customer benefits from federal production tax credits, interest savings from loan guarantees from the U.S. Department of Energy (DOE), and the fuel savings of nuclear energy.
Customers will also save money throughout 2018 following the recent approval by the Georgia PSC of Georgia Power's updated 2018 Nuclear Construction Cost Recovery (NCCR) tariff. The tariff allows the company to collect financing costs for the Vogtle expansion every month, a structure which saves customers hundreds of millions of dollars by reducing financing and borrowing costs, while also phasing the new units into rates over time helping to avoid "rate shock" once the new units come online. As a result of the Toshiba parent guarantee payments and changes in federal tax law, customers will pay $139 million less than expected in 2018 for the Vogtle project with the typical residential customer using 1,000 kilowatt-hours per month paying $1 less each month than they did in 2017.
To learn more about Georgia Power's commitment to safe, clean, reliable and affordable energy, including the Vogtle 3 & 4 nuclear expansion, visit www.GeorgiaPower.com.
About Georgia Power
Georgia Power is the largest electric subsidiary of Southern Company (SO), America's premier energy company. Value, Reliability, Customer Service and Stewardship are the cornerstones of the company's promise to 2.5 million customers in all but four of Georgia's 159 counties. Committed to delivering clean, safe, reliable and affordable energy at rates below the national average, Georgia Power maintains a diverse, innovative generation mix that includes nuclear, coal and natural gas, as well as renewables such as solar, hydroelectric and wind. Georgia Power focuses on delivering world-class service to its customers every day and the company is consistently recognized by J.D. Power and Associates as an industry leader in customer satisfaction. For more information, visit www.GeorgiaPower.com and connect with the company on Facebook (Facebook.com/GeorgiaPower), Twitter (Twitter.com/GeorgiaPower) and Instagram (Instagram.com/ga_power).
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this communication is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning expected customer rate impacts, expected cost savings and customer benefits and other future actions related to Plant Vogtle Units 3 and 4. Georgia Power cautions that there are certain factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Georgia Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Georgia Power's Annual Report on Form 10-K for the year ended December 31, 2017, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of any failure to amend the DOE loan guarantee to allow for additional borrowings; state and federal rate regulations and the impact of pending and future rate cases and negotiations; the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; the uncertainty surrounding the recently enacted federal tax reform legislation, including implementing regulations and Internal Revenue Service interpretations, actions that may be taken in response by regulatory authorities, and its impact, if any, on the credit ratings of Georgia Power; current and future litigation or regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; effects of inflation; the ability to control costs and avoid cost overruns during the development construction and operation of facilities, which include the development and construction of generating facilities with designs that have not been previously constructed; the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; advances in technology; legal proceedings and regulatory approvals and actions related to Plant Vogtle Units 3 and 4, including Georgia Public Service Commission approvals and NRC actions; interest rate fluctuations and financial market conditions and the results of financing efforts; changes in The Southern Company's or Georgia Power's credit ratings, including impacts on interest rates, access to capital markets, and collateral requirements; the impacts of any sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on foreign currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the benefits of DOE loan guarantees; and the effect of accounting pronouncements issued periodically by standard setting bodies. Georgia Power expressly disclaims any obligation to update any forward-looking information.
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