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Co-owners of partly built Georgia nuclear units argue as decision looms

Washington — One of the owners of the two nuclear generating units being built at the Vogtle station in Georgia is demanding protection from future cost overruns from the largest owner, Georgia Power, and threatening to veto completion of the project as a deadline for action approaches Tuesday.

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Oglethorpe Power, a Georgia power cooperative, set conditions Monday night for going forward with the project, saying a cap on future cost overruns was needed to protect its members. Oglethorpe said Georgia Power, which is part of an investor-owned utility, should offer such protection because a related company is managing the project and it is a for-profit company with the most to gain from the project.

A cost overrun of $2.3 billion was announced in August, triggering a requirement that the three largest owners -- Oglethorpe, Georgia Power and Municipal Electric Authority of Georgia -- affirm their agreement to go forward. Should the three not be unanimous in their decision, the project would be canceled.

MEAG and Georgia Power approved the project completion Monday, but Oglethorpe gave only "conditional" support for continuing the project, saying protections including a cap on the project's current budget were needed. Oglethorpe said it would approve the new cost overruns plus an expansion of the project contingency, a provision for future cost increases, of $800 million, but sought to be protected from any costs beyond that.

In a statement Monday, Georgia Power said "Oglethorpe Power is using the vote to try to burden others with its obligations and extract unreasonable concessions."

In reply, Oglethorpe said in a statement Tuesday that a cap for its costs "is a sensible and equitable solution," adding that a Georgia Power budget announced in December was "significantly deficient." Southern Company, the holding company owner of Georgia Power, has the ability to allow equity investors to absorb cost overruns, something Oglethorpe and MEAG cannot do, Oglethorpe said.

The owners allowed Olgethorpe until 5 pm EDT (2100 GMT) to make a final decision on the project's fate.

The overall project to add two 1,150-MW reactors at the site of two operating units in Waynesboro, Georgia, is two-thirds complete. More than $11 billion has been spent so far on the units, the owners have said in regulatory filings.

Southern Company subsidiary Georgia Power is the 45.7% owner of the two-unit expansion, with Oglethorpe Power holding 30%, MEAG holding 22.7% and the city of Dalton in Georgia owning the balance. Under the revised ownership agreement, the three largest owners must approve the revised budget by the end of September or the project will be halted, Southern Company has said.

A series of delays and increased cost estimates have taken place on the project, which has experienced first-of-a-kind design, licensing and construction issues that project owners have said are related to the fact it is the first new nuclear plant project started in the US in about 30 years.

Originally planned to cost $14 billion with completion expected in 2016, the new cost estimate could be as high as $28 billion, and completion is forecast for 2021 for the first new unit. -- William Freebairn, william.freebairn@spglobal.com

-- Edited by Annie Siebert, newsdesk@spglobal.com