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Southern CEO maintains Vogtle unit 3 will start up in 2022, despite latest delay

  • Author Abbie Bennett
  • Theme Energy

Southern Co. Chairman, President and CEO Tom Fanning remains confident the first of two new reactors at the Alvin W. Vogtle Nuclear Plant will be online in 2022, despite another recently announced delay.

In July, the plant ran hot functional testing for the 1,117-MW unit 3, which is one of the final, significant reactor tests that places plant systems into normal operating conditions to ensure it is prepared to go online. Some structural issues emerged from that testing when metal parts, including structural supports, expanded more than expected and the company learned it may need to make adjustments. The testing itself, though, was a major milestone, Fanning said.

SNL Image

Southern Co. Chairman, President and CEO Tom Fanning

Source: Southern Co.

"That was enormous," the CEO said in an interview Nov. 4. "What we said to everybody was, 'We open up the hood of the car, we look at the engine and we do a comprehensive walk down of the rest of the site.'"

What the company found are more "punch-list items than what we expected," Fanning said. "Nothing major, but we have to deal with them. In the nuclear world, there's no such thing as a small issue."

The company has also seen lower productivity onsite than expected, Fanning added, with more attrition than he hoped for among electricians, engineers and site supervisors.

Fanning remains confident that the expansion will hit its latest timeline estimates — unit 3 will be in service in the third quarter of 2022 and unit 4 will be in service in the second quarter of 2023. The utility's previous target dates, announced in July, were to complete unit 3 in the second quarter of 2022 and unit 4 in the first quarter of 2023.

"Even now, I thought we have margin," Fanning said. "We haven't used it up. I just think looking at the trends we had been seeing, it was a prudent move to signal to the street and everybody else it may take more time."

In an environment with rising fuel costs, supply chain constraints and inflation, Fanning said Southern's goals are firmly fixed on managing customer impact and reliability, and Vogtle plays a key part.

"We still believe plant Vogtle, for all the cost issues, for all of the schedule delays, will still come in at or below the levels that were originally promised when we started this project, which is like a 10% price increase," the CEO said.

Company leaders believe they'll hit that 10% rate increase for customers and then the cost will dissipate over time, Fanning said.

"We think that we're going to be so happy, especially considering the net-zero environment we're all pointing towards, that Georgia Power Co. is adding nuclear capacity to its portfolio and it will serve the state so well for decades to come."

On Nov. 2, the Georgia Public Service Commission unanimously approved a settlement agreement between Georgia Power and public interest advocacy staff allowing the Southern subsidiary to recover $2.1 billion in costs for construction of the two new Vogtle reactors. 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 for its share.

Georgia Power owns a 45.7% interest in the Vogtle nuclear expansion project. Other owners include Oglethorpe Power Corp. at 30%, the Municipal Electric Authority Of Georgia at 22.7% and the city of Dalton, Ga., at 1.60%, according to S&P Global Market Intelligence data.