Thursday, November 17, 2016

Paying For Vogtle

Much ink has been wasted in the traditional press on the deliberations over who will pay for cost overruns at Plant Vogtle. The commencement speaker at the 1981 Southern Tech graduation ceremony, a retired Bell South executive more notable for what he said than who he is, offered this pearl of wisdom:
Big corporations do not pay taxes, they collect them.
His point that governments' deflective use of corporate America as a funding pass-thru is equally applicable to the current dustup between the Georgia PSC and ratepayers. Some say that Georgia Power should pay the cost overruns but this ignores some key facts. First Georgia Power pays all its bills by collecting money from, you guessed it, ratepayers. Others argue that the company's profits or shareholders should suffer but the financial health of the company affects bond ratings that underpin the cost of borrowing money. A cost also paid by ratepayers.

When it comes to regulated monopolies the maxim "you can pay me now or you can pay me later" applies.