Secret industry money helped utility interests win Georgia runoff

With the contentious gubernatorial race behind them, the citizens of Georgia went to the polls this week to vote in two runoff elections: one for the secretary of state office that opened when Republican Brian Kemp resigned after being elected governor, and one for a six-year seat on the five-member Public Service Commission that regulates electric and natural gas utilities and telecommunications.

In both instances the Republican won — state Rep. Brad Raffensperger for secretary of state and Chuck Eaton for the PSC, a seat he's held since 2006. Both of their offices will have critical roles in shaping the state's energy future, with Raffensperger's overseeing elections for offices that set energy policy including the PSC, and Eaton's setting utility rates, overseeing new generation projects, and determining how to divide their costs between captive ratepayers and profit-seeing shareholders.

Georgia is facing a decisive moment for its energy future, with controversy mounting over ongoing construction of two next-generation Westinghouse AP1000 nuclear reactors at Georgia Power's Vogtle plant in Burke County near the South Carolina border — the single most expensive capital project in state history. Once touted as the spark for a nuclear power renaissance, the AP1000 has proven problematic. The Vogtle project is five years behind schedule, and its anticipated costs have doubled to almost $27 billion. The project is also facing a legal challenge from the Southern Environmental Law Center on behalf of Georgia Watch, Georgia Interfaith Power and Light, and the Partnership for Southern Equity, which say that the new reactors are unnecessary given strides in efficiency and flattening power usage. Next door in South Carolina, the utilities that had pursued building the same kind of reactors have canceled those plans due to skyrocketing costs, which also led to Westinghouse's 2017 bankruptcy.

A year ago this month, the PSC met to decide whether to allow construction to continue. Commissioners including Eaton voted unanimously to finish the project. However, amid critics' calls to cancel the reactors outright, they did require Georgia Power to absorb some of the cost overruns.

In his tenure on the PSC, Eaton has voted repeatedly to approve the Vogtle expansion and assign new costs to ratepayers. But his runoff opponent, Democrat Lindy Miller, was outspoken in her criticism of forcing the utility's customers to continue paying for the over-budget reactors and the commission's failure to create adequate cost-control incentives. To date, thanks to a controversial Georgia law that allows utilities to collect construction costs from ratepayers before a project is completed, Georgia Power has already collected $2 billion from its customers for the project, and over half of those funds are actually profits for the utility. Meanwhile, the average electricity consumer in Georgia — a state that has among the highest energy costs in the nation — has been paying about $100 a year for the planned reactors, which are also set to receive about $12 billion in federal loan guarantees.

That Georgia elects its PSC makes it somewhat unusual. Nationwide, only only 11 states elect utility regulators, including the other Deep South states of Alabama, Louisiana, and Mississippi. Elsewhere, these regulators are appointed by governors, except in Virginia, where the legislature does the appointing. The pitfalls of electing industry regulators in money-soaked elections is obvious, which is why Georgia law bans utilities from contributing directly to PSC candidates' campaigns. But utilities have long gotten around this ban by having company executives, employees, and their family members contribute to campaigns instead, as the Atlanta Journal-Constitution documented in a 2012 investigation. It found that Eaton had received almost 86 percent of his contributions from current and former executives and employees of PSC-regulated utilities as well as law firms, lawyers, lobbyists, consultants, and family members connected to the companies, and from alternative energy companies and their lawyers and lobbyists.

Since Eaton, a former manufacturing account executive, first ran for PSC in 2006, his campaign has taken in more than $650,000 in contributions, according to FollowTheMoney.org, making him the leading fundraiser among sitting commissioners in that period. But this year, Eaton's fundraising totals were far surpassed by those of Miller, a longtime employee of global business consulting firm Deloitte and the co-founder of a solar energy company. Miller took in $1.2 million while Eaton raised just shy of $300,000, according to a Savannah Morning Times review of state contribution records. According to partial data compiled by FollowTheMoney.org, a substantially greater portion of Eaton's contributions than Miller's came from energy industry interests.

With its preferred candidate losing the money race, the industry stepped up and found another way to exercise its will in the PSC election: through independent spending.

The week after the Nov. 6 general election, an independent political spending group calling itself Georgians for a Brighter Future was formed to support Eaton in his runoff against Miller. An Atlanta Journal-Constitution analysis of its campaign finance reports found that it was funded by a Washington, D.C.-based group called Nuclear Matters, the advocacy arm of the Nuclear Energy Institute — the trade association for the nuclear energy industry. Georgians for a Brighter Future spent at least $1 million supporting Eaton's re-election, with that money going to purchase mailers as well as Facebook ads that reached more than 1.2 million people in the days leading up to the runoff.

As the Savannah Morning News reported, Georgia Power is a member of the Nuclear Energy Institute and has numerous connections to the group:

The Nuclear Energy Institute lists Georgia Power on its members roster under Southern Nuclear Operating Company, the nuclear division of the parent Southern Company. Law firm Troutman Sanders, which represents Georgia Power, is also a dues-paying member. Georgia Power president and CEO W. Paul Bowers sits on the board of the Nuclear Energy Institute. Southern Nuclear's president and CEO Steve Kuczynski is on the executive committee of Nuclear Matters. On the Advisory Council for Nuclear Matters are former Georgia PSC Chairman Stan Wise and University of Georgia Professor and vocal Vogtle supporter David Gattie.

Miller blasted the outside group in a press release distributed a few days before the election. "It couldn't be more clear that the people in power are threatened by my calls for transparency and accountability within the Public Service Commission," she said. "Why do we have the third highest energy bills in the country? Because my opponent and the special interests that fund his campaign continue to put profits ahead of people. To the groups who are dumping millions of dollars into this race, my message to you is this: you can't buy Georgia."

But then, the nuclear energy industry didn't have to buy all of Georgia; it needed only to influence the smaller, whiter, and more Republican electorate that typically turns out for runoff elections, including this one. In the end, Eaton won by a 52-48 margin. Following the nuclear industry's million-dollar outside spending effort, all five of the PSC members remain Republicans who have supported pursuing Vogtle reactor construction at ratepayers' expense — just as Georgia Power wanted.