JACKSONVILLE, Fla. – JEA management admits that customers' bills might go up to pay for a nuclear power plant in Georgia that has cost billions of dollars and still isn’t finished.
JEA promised to pay 41% of the cost of two reactors at Plant Vogtle, a joint-project with Georgia Power and other utilities located near Waynesboro, Georgia, south of Augusta. When JEA entered into the deal in 2008, the price tag to the JEA was supposed to be $1.4 billion. In exchange, JEA would get a deal on electricity rates for 20 years.
Cost overruns have increased that cost to about $3 billion.
Jacksonville could start receiving power from the Plant Vogtle in about a year.
Instead of looking at the plant as a huge liability, the JEA says receiving nuclear power will help hold down electric rates in the future. But short term, the JEA admits that rates will go up -- slightly.
When the costs of the plant began to spiral at a time when JEA’s electric consumption is going down, the JEA tried to get out of the deal. When that failed, the JEA began looking at how to pay for it.
“When we look at the financial performance for the electric system, we are finding that in years 23 through 25, when applying revenue and expenses, about a 1% shortfall in revenue,” JEA Executive Director Paul McElroy said.
McElroy said the board chairperson will visit the plant Wednesday.
“We really want to get up and have a look at the site to see the progress and talk to the executives there,” Wednesday said. “Secondarily, sit down with the executives and start rebuilding a relationship with that.”
But JEA also knows it needs to build a relationship with JEA customers, badly damaged in last year’s controversial and ultimately unsuccessful effort to sell itself.
JEA admits there is a change the cost overruns at the plant will require a rate increase, although not immediately.
McElroy says there are three ways they could address that shortage.
- Make budget cuts at JEA
- Expand the busineses
- A 1% rate increase each year in those three years
The third option would be an increase of about a dollar for each $100 of your electric bill.
Nothing has been decided and many things could change before electricity from Plant Vogtle begins flowing.