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Georgia Power says Vogtle expansion still on schedule

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Georgia Power says Vogtle expansion still on schedule

SNL Image

The under-construction Unit 3 at the Alvin W. Vogtle Nuclear Plant in a January 2018 photo.
Source: Georgia Power Co.

Georgia Power Co. on Feb. 28 asked state regulators to approve the $448 million it spent on the Vogtle nuclear plant expansion in the second half of 2017.

The Southern Co. subsidiary announced in a filing with the Georgia Public Service Commission that units 3 and 4 are still slated to be completed by the revised in-service dates of November 2021 and November 2022, respectively. Several developments have resulted in customer bills going down, the company said, arguing that finishing the reactors remains in ratepayers' best interest.

"The Project continues to work toward completing construction on an accelerated schedule, which is currently tracking ahead of the target in-service dates," Georgia Power wrote in its filing.

Georgia Power, the only Vogtle owner required to submit its expenses for PSC review, spent $542 million on Vogtle in the first half of 2017, with over 90% of that amount allocated to Westinghouse Electric Co. LLC, the former project contractor that declared bankruptcy in March 2017.

Westinghouse's troubles threw a wrench into Vogtle's budget and schedule, with many questioning whether Georgia Power could keep building units 3 and 4. But the utility ended up securing a full guarantee payment from Toshiba Corp., Westinghouse's parent at the time, for it and the other owners: Oglethorpe Power Corp., the Municipal Electric Authority of Georgia and Dalton Utilities.

Toshiba's payment, along with the U.S. Department of Energy granting new loan guarantees to the owners and Georgia Power attorneys extracting key concessions from PSC staff, gave Georgia regulators the assurances they needed in December 2017 to greenlight Vogtle's continued construction, along with its revised cost and schedule estimates.

Congress extending federal production tax credits for new nuclear projects in February 2018 also gave Vogtle a much-needed boost.

Taken together, those developments "demonstrate [Georgia Power's] commitment to completing the new units, which will provide millions of Georgians with carbon-free energy and help keep electric rates low for 60 to 80 years into the future," the company wrote in its Feb. 28 filing.

Georgia Power and corporate affiliate Southern Nuclear Operating Co. have kept project momentum going since they took over from Westinghouse. But the utility acknowledged that "challenges remain" at the site.

"Company Executive and Project Management continue their engagement with the national labor unions to ensure sufficient resources are available to achieve the accelerated schedule," Georgia Power wrote. "Through leadership and oversight, the labor force must be able to maintain, and in some areas, improve productivity."

The subsidiaries are carefully monitoring progress at Vogtle's sister project in China, according to the filing. Speaking on a Feb. 21 earnings call, Southern Chairman, President and CEO Tom Fanning characterized recent delays in finishing the Asian venture as a "regulatory oversight," and not indicative of problems at Vogtle.

After accounting for the $3.68 billion Toshiba guarantee and $188 million in customer refunds, Georgia Power estimates it will spend $7.3 billion on remaining construction and capital costs. That forecast amount is technically all available to recoup from customers, as the PSC affirmed in a January 2018 order that no cost cap is in place and all prudently-incurred costs will be recoverable.

Georgia Power confirmed in its Feb. 28 filing that it would put those prudent costs into rate base. Since receiving its PSC certification in 2009, the utility has spent $10.36 billion on the Vogtle project.