Southern to take over Vogtle construction from bankrupt Westinghouse
- Southern Co. will take over construction management of the Vogtle nuclear plant from bankrupt developer Westinghouse under an agreement reached late Friday with the developer's parent Toshiba.
- The deal extends an interim construction agreement until June 3 while the companies finalize the pact and obtain approvals to transfer project management. Southern has said it is owed $3.7 billion from Toshiba, but that it may not be enough to complete the reactor construction, which is years behind schedule and billions over budget.
- Reuters reports the agreement is contingent on an understanding that SCANA Corp., the owner of another nuke being built by Westinghouse, will also wrest control of construction from the developer so that the two companies can share resources. The companies did not comment on that report, which was based on unnamed sources.
Southern and Toshiba went down to the wire on Friday, reaching an deal to finish construction on the Vogtle plant just hours before an interim construction agreement was set to expire.
Under the pact, Westinghouse will continue construction through June 3 as the companies transfer project management responsibilities. Southern's subsidiary Georgia Power will continue to work to secure $3.68 billion it says it is owed by Westinghouse, as well as assessing with other plant owners whether it should complete construction or abandon the project.
At least part of that analysis will depend on the outcome of parallel negotiations between Toshiba and SCANA Corp., the primary owner of the V.C. Summer nuclear plant in South Carolina. Unnamed officials close to the deal told Reuters that it would be more cost-effective to complete the projects together, though SCANA's construction arrangement with Westinghouse means it has until June 26 to come to a decision.
With Westinghouse out of the picture, both companies would have to prove to state regulators that continuing construction on their own would be more cost effective than replacing the capacity with other generation sources, primarily natural gas.
Earlier this month, SCANA officials said multiple project delays mean that federal nuclear tax credits would need to be extended past their current 2020 deadline to ensure completion of the project. That may apply to the Vogtle plant as well, after Georgia Power executives told regulators this month that the 2019 and 2020 deadlines for reactor completion "no longer seem feasible."
Both the Summer and Vogtle plants are billions over budget and years behind schedule, with the delays the primary factor in Westinghouse's bankruptcy filing in March. The developer's financial woes threatened to take down all of Toshiba, and some media reports last week said the company was preparing for bankruptcy. This month, the Japanese technology giant announced plans to split into four subsidiaries to protect its other businesses from the fallout.
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