The news just keeps getting worse about Plant Vogtle

[private]When it comes to the two nuclear reactors Georgia Power is trying to build at Plant Vogtle, there never seems to be any good news – just a steady stream of bad news, or worse.

The latest negative developments were revealed this past week by executives of the Southern Co., the holding company that owns Georgia Power and several other utilities.

Southern Co. confirmed that the total cost of the Vogtle project, in the event it is actually completed, will be at least $25 billion and potentially as high as $27 billion.

Georgia Power is responsible for 45.7 percent of that cost, with the rest divided up among the other project partners: Oglethorpe Power (30 percent), MEAG Power (22.7 percent), and Dalton Utilities (1.6 percent).

With a final cost range of $25 billion to $27 billion, that’s nearly double the $14 billion that Georgia Power estimated the project would cost when it first proposed it to the Public Service Commission in 2008.

But wait, there’s more: Southern Co. CEO Tom Fanning disclosed that the service date for Vogtle’s Unit 3 has been pushed back to sometime between February 2021 and March 2022, while Unit 4 won’t be in service until sometime between February 2022 and March 2023.

When Georgia Power first secured authorization for the project from the PSC, it said Unit 3 would be operating by 2016 and Unit 4 by 2017. That means the project is now at least five to six years behind schedule.

There is one faint bit of optimism for the Vogtle partners. Westinghouse, the primary contractor on the project, was forced into bankruptcy in March because of the cost overruns. Southern Co. has now assumed management responsibility for completing the project, which is one reason why the cost estimates continue to skyrocket.

Toshiba, the parent company of Westinghouse, has said it will pay the Vogtle partners $3.68 billion because of the bankruptcy, an amount that would be deducted from the current cost estimate of $25 billion.

However, Toshiba is on increasingly shaky financial ground itself and could end up filing for bankruptcy also – which puts the future of that $3.68 billion payment very much in doubt.

The PSC public interest advocacy staff has already recommended that Georgia Power’s shareholders should have to eat the cost if Toshiba skips out on that $3.68 billion payment, saying in a recent filing: “the risk of non-collection of the Toshiba Parental Guarantee is appropriately on the company, not ratepayers.”

The Southern Alliance for Clean Energy, an intervening party in the Vogtle case, filed a similar recommendation with the PSC.

The recommendation set off a nuclear reaction from Georgia Power’s chief attorney, Kevin Greene, who sent a sternly worded letter to the PSC Friday demanding that the commissioners reject the recommendation – a move that would allow the utility to pass off that possible loss of funds to the ratepayers.

“Approving such recommendations will have far reaching adverse impacts upon the Vogtle Project, the Company, and all customers,” Greene complained.

A crucial date in the project is approaching, as Georgia Power has said it will tell the PSC by the end of August whether it will cancel the Vogtle project or continue to proceed with construction.

But even pulling the plug on Vogtle would not be cheap.

“If a decision is made to cancel the project, we have estimated Georgia Power’s cancellation cost at approximately $400 million,” Fanning said in an earnings call with Wall Street analysts.

© 2017 by The Georgia Report


Tags: Georgia Power , Plant Vogtle , PSC , Tom Fanning