Georgia Power Co. reached a settlement with public interest advocacy staff to recover $2.1 billion in costs related to the construction of two new reactors at the Alvin W. Vogtle Nuclear Plant.
The stipulation, filed Oct. 13, outlines how the utility will recover costs of Vogtle unit 3 and shared facilities between units 3 and 4. Georgia Power will include $2.1 billion of the $2.38 billion previously deemed prudent by regulators in its rate base and will recover related depreciation expenses at the public interest advocacy staff's proposed depreciation rate, according to the stipulation filed Oct. 13. (Docket No. 43838)
The Southern Co. subsidiary is expected to raise annual rates by about $302 million, effective the month after the 1,117-MW unit 3 is placed in service, according to the settlement. That increase is expected to be partially offset by a decrease in the nuclear construction cost recovery tariff of about $78 million, set to be effective Jan. 1, 2022.
"As with any settlement, neither party received everything they advocated for or requested, and compromises were made on several complex issues," Georgia Power CFO and Treasurer Aaron Abramovitz said during an Oct. 14 Georgia Public Service Commission hearing.
Abramovitz said the utility's initial requested annual revenue requirement of about $370 million was reduced to about $300 million, which is expected to lead to an increase of approximately $5.19 per month for the typical residential customer. After unit 3 reaches commercial operation, when combined with the reduction in the nuclear construction cost recovery tariff in January 2022, the resulting impact to typical residential customers is estimated to be approximately $3.78 per month, Abramovitz added.
The Georgia PSC is expected to issue a final decision on the proposed settlement Nov. 2.
In August, Georgia regulators unanimously approved a plan to alter how cost overruns are handled for the Vogtle expansion. Under the agreement between the commission and Georgia Power, regulators were expected to continue to review the project's semiannual progress reports but wait until plant expansion is complete before determining whether expenses are "reasonable or prudent" and whether those costs can be recovered from ratepayers.
Overall project costs have nearly doubled from initial estimates of $14 billion to about $27 billion after years of construction, inspection and other delays. Georgia Power has not sought approval for any capital costs above the $7.3 billion limit.
A federal inspection of the plant uncovered apparent violations that were expected to prompt additional oversight for the two additional reactors, according to an August preliminary report on the Nuclear Regulatory Commission inspection. A final significance determination and enforcement decision is expected within 90 days of the preliminary report.
Georgia Power owns a 45.7% interest in the Vogtle nuclear expansion project. Other owners include Oglethorpe Power Corporation at 30%, the Municipal Electric Authority Of Georgia at 22.7% and the City of Dalton Georgia at 1.60%, according to S&P Global Market Intelligence data.
