Southern Company and its subsidiary Georgia Power announced on Thursday an approximately 20% reduction in the construction workforce for the nuclear Vogtle Units 3 and 4, as COVID-19 continues to impact the industry.
Vogtle Unit 3 and 4 are expected in operation in 2021 and 2022 respectively, but the project has already faced significant cost overruns and delays. The company wrote in an 8-K filing with the Securities and Exchange Commission that the cuts will address labor productivity and increase efficiency among the remaining workforce.
The project is slated to begin its construction monitoring proceedings on May 5, which are done every six months with state regulators. Local advocacy group Georgia Watch expects more detail about construction efficiency and staying on track with Unit 3.
The company announced staff reductions are expected late into the summer. Vogtle Unit 3 and 4 had a large construction staff of about 9,000 workers.
"Georgia Power currently does not expect this mitigation action to affect the total project capital cost forecast or the ability to achieve the regulatory-approved in-service dates" for the two units, according to the SEC filing. Unit 3 is expected to reach that on November 2021 and Unit 4 on November 2022.
The company has targeted in-service dates of May 2021 and March 2022 for Units 3 and 4, but the recent COVID-19 updates make those targets "real long-shots," Scotia Capital analyst Andrew Weisel told Utility Dive.
Meeting the regulatory-approved in-service dates will "depend on the frequency of future COVID-19 cases and the duration of social distancing practices, which seem impossible to predict," he said.
Southern had previously confirmed 42 Vogtle construction workers had tested positive for the novel coronavirus, according to local news station WRDW.
"We think it's right that they're putting the health and safety of the workers first, that's a top priority," Liz Coyle, executive director of Georgia Watch, told Utility Dive. "I'm concerned that the details are pretty scant," regarding COVID-19 impacts and affected staff.
Positive testing for the novel coronavirus among employers was not surprising "given the sheer number of workers on site ... even despite the companies' best efforts to enhance safety protocols, including social distancing," Weisel said. "It also wouldn't surprise us if the number of confirmed cases increases, and if additional headcount restrictions are imposed."
"Several areas of the construction site simply wouldn't allow for workers to maintain six feet of distance and still remain productive, in our view," he said.
Southern wrote in the SEC filing that the reduction in workers is expected to be in compliance with the latest Center for Disease Control recommendations.
The large amount of construction staff had been identified as a difficulty prior to COVID-19 conditions and social isolation best practices.
"That was actually an issue that has been raised in prior proceedings by commission staff, that there were so many people on site that it might have been counterproductive," Coyle said.
The staff reduction "is expected to provide operational efficiencies by increasing productivity of the remaining workforce and reducing workforce fatigue and absenteeism," according to the SEC filing.
Southern continues regular meetings with the Nuclear Regulatory Commission and the Georgia Public Service Commission, although adjustments for teleconferencing are made based on COVID-19 risks.
The upcoming state PSC proceeding will allow commission staff and intervenors like Georgia Watch an opportunity to cross examine the company on Vogtle construction progress and its cost recovery request. Reducing the workforce would cost Georgia Power between $15 million to $30 million, according to the SEC filing.
On Thursday, Southern had a public meeting with the NRC to check on the organizational structure of the Vogtle site, as a complete four unit facility, without discussing the staffing reduction or construction schedule as a result of COVID-19.
The company answered several NRC questions regarding standardization across Vogtle Units 3 and 4. Southern told NRC operating experience procedures will be the same across all the units, with substantially similar engineering program procedures across Vogtle 1-4.
Until Unit 4 completes its first refueling outage, the new units will have a separate engineering organization structure from Vogtle Unit 1 and 2. Nuclear refueling requires a large number of specialized staff, and the industry has seen some disruption due to the spread of the novel coronavirus. Both Unit 1 and 2 are scheduled for refueling this year.
Southern will share its Q1 earnings on April 30.