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US offers $3.7 billion loan guarantees to Georgia nuclear project

Washington — The US Department of Energy said Friday it has offered conditional loan guarantees worth $3.7 billion to help save efforts to build two nuclear reactors in Georgia, bringing the total federal backing for the delayed and over-budget project to $12 billion.

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The guarantees will go to three of the four owners of the plan to add two 1,150-MW reactors at the Vogtle site in Waynesboro, Georgia, in an effort to help them finance the additional costs of completing the project.

Georgia Power, a 45.7% stakeholder in the project, would receive an additional $1.67 billion loan guarantee, 22.7% owner Municipal Electric Authority of Georgia, through three subsidiaries, would receive guarantees of $415 million and 30% shareholder Oglethorpe Power would receive $1.6 billion, DOE said in a statement.

DOE had previously provided $8.3 billion in loan guarantees to the three project owners, with a federal government bank providing the actual loans.



The city of Dalton, Georgia, which owns 1.6% of the Vogtle expansion, did not seek loan guarantees.

The fate of the project was thrown into doubt when contractor Westinghouse, the designer of the reactors being built at the site under a fixed-price contract, filed for bankruptcy protection in March, citing cost overruns at the Vogtle expansion and the similar project to add two units at South Carolina Electric & Gas's Summer station.

Both projects were affected by first-of-a-kind licensing, procurement and construction problems related to the AP1000-model reactors being built there. The units are about two-thirds complete overall, although construction progress has been slow.

Costs on the Vogtle expansion, once estimated at $14 billion, could exceed $20 billion, officials have said.

Related Snapshot video: US power companies have a history of walking away from nuclear projects

Vogtle-3 and -4 will begin operating commercially in November 2021 and November 2022, respectively, under a new construction schedule, Georgia Power said in August. That is a couple of years later than the previous schedule, which called for operation in 2019 and 2020, respectively, for the reactors.

SCE&G and co-owner Santee Cooper said in July they would abandon efforts to complete the units being built at the Summer plant, citing risks from proceeding without a fixed-price guarantee.

The co-owners of the under-construction Vogtle units said August 31 they would go ahead and complete the project without Westinghouse as the main contractor as long as regulators in Georgia approved full cost recovery from ratepayers for Georgia Power.

They also said completion of the reactors depended on payment of more than $3 billion from Westinghouse parent company Toshiba, additional loan guarantees from DOE as well as legislative action to extend deadlines on production tax credits available for next-generation nuclear plant designs. Those tax credits, of $18/MWh, were available to units that entered service before 2021, a deadline the Vogtle reactors can no longer meet.

"Advanced nuclear energy projects like Vogtle are the kind of important energy infrastructure projects that support a reliable and resilient grid, promote economic growth, and strengthen our energy and national security," Secretary of Energy Rick Perry said in the statement.

--William Freebairn, william.freebairn@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com