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Georgia PSC approves recent Vogtle spending

Georgia regulators approved Georgia Power Co.'s most recent round of expenditures at the Alvin W. Vogtle Nuclear Plant expansion and expressed support for the project's completion.

Members of the Georgia Public Service Commission on Aug. 15 voted unanimously to certify the Southern Co. subsidiary's $222 million in spending on Vogtle units 3 and 4 during the second half of 2016. Commissioners are now waiting for Georgia Power, the plant's majority owner, to present its recommendation on whether the PSC should issue a "go" or "no-go" decision on pursuing completion.

To facilitate this submission, PSC Chairman Stan Wise introduced a motion requiring Georgia Power in its filing, expected by August's end, to address 14 questions on Vogtle's viability, including the results of the utility's cost-to-complete analysis, along with whether it is in customers' best interest to continue construction.

Wise's motion, approved by a 4-1 vote, also seeks an answer on how Vogtle's four owners responded to the bankruptcy of former contractor Westinghouse Electric Co. LLC, and how they sought to protect the interests of customers after the Toshiba Corp. subsidiary rejected its engineering, procurement and construction, or EPC, contract.

Westinghouse had previously been expected to absorb additional Vogtle costs before project management was transferred to Georgia Power and corporate affiliate Southern Nuclear Operating Co. A condition of this transfer was that Westinghouse would reject the EPC contract.

"We know full well that the current schedule and cost is no longer viable," Wise said at the PSC meeting. "This vote today would send a message to the company's partners, ratepayers, Wall Street, all involved that the commission continues to be supportive of this project as it moves along. It aids, I think, this commission in the ability to determine the appropriateness of whether this project should go forward or not go forward."

Wise added that Georgia Power's go or no-go recommendation will not change the prudency standard or the performance requirement outlined in a December 2016 settlement between the utility and the PSC. In the agreement, commissioners categorized $3.3 billion in Georgia Power's construction costs incurred through 2015 as prudent.

As of June 30, Georgia Power said it has spent on Vogtle $4.5 billion in construction while in progress costs. If the utility were to complete both reactors by March 2023, it projected $4.6 billion for its share of costs. The company estimates financing costs during the construction period of approximately $3.1 billion to $3.5 billion, of which $1.4 billion has already been incurred.

In the same time period, Oglethorpe Power Corp., which owns 30% of the plant, has spent $3.7 billion. Oglethorpe projects a budget range of $6.5 billion to $7.3 billion if construction on the new Vogtle reactors continues and assuming 100% recovery of its $1.1 billion share of the Toshiba guarantee.

The other Vogtle owners are the Municipal Electric Authority of Georgia and Dalton Utilities.

During the meeting, several commissioners reiterated their support for the project, noting the value of the original Vogtle reactors.

"As chairman of the [PSC's] Energy Committee, I've publicly stated many times that I, too, want this project finished," Commissioner Lauren "Bubba" McDonald said at the meeting. "I request that my colleagues join me in asking all the partners to come to the commission and discuss our future collectively."

McDonald said he has personally met with every CEO of each of the Vogtle owners and "verbally expressed to them my desire to see this project completed."

The construction of Vogtle's original reactors in the late 20th century also ran into cost overruns and schedule delays, McDonald said. "But we have history showing the value of units 1 and 2 over time for the people of Georgia," he added. "I don't like failure. I'd like to see it done, but I'd like to see it done in a very responsible way."

Commissioner Chuck Eaton said Wise's motion, along with an amendment by Vice Chairman Tim Echols allowing the PSC to rescind or revise future commission orders on Vogtle if the owners recommend a no-go, "allows us to address the Vogtle issue in a substantive matter, which I think the public and many want to see happen, that we can determine any new forecasts, any new schedules."

"I think that all of my colleagues want to see the [new units] built," Eaton continued. "I feel [the motion], coupled with the amendment, gives us the adequate protections on the other side if the worst-case scenario is proposed: abandonment."