Southern, Westinghouse strike $3.7B deal to complete Vogtle nuclear plant
- Georgia Power and its parent company, Southern Co., have reached an agreement with Westinghouse Electric to complete the long-delayed Vogtle nuclear plant expansion, but the ultimate fate of the plant remains unclear.
- Under terms of the agreement, Westinghouse parent Toshiba has guaranteed $3.68 billion in payments to Georgia Power for completion of the project. However, the Wall Street Journal reports a Georgia Public Service Commission consultant filed a report last week concluding that continued development of the Vogtle expansion is not economic and should be halted.
- Georgia Power could abandon the project if regulators find it is not cost effective. Toshiba is reportedly working on reaching a similar agreement with SCANA Corp., to complete construction of the Summer nuclear project it is building in South Carolina.
Just as Georgia Power reached a construction deal with bankrupt contractor Westinghouse, regulatory staff in Georgia are casting further doubt on the final prospects for the plant.
Even amid rising gas prices, the Journal reported, a PSC consultant found that it makes sense to shut down the project.
The project is billions over budget and years behind schedule. The completion date for Vogtle’s two new reactors, which has been extended multiple times, is now December 2019 and September 2020, respectively.
The utility, however, says moving ahead is the right decision.
Paul Bowers, chairman, president and CEO of Georgia Power, said the agreement would "allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power."
Bowers added that the utility is working with project co-owners to develop a full-scale schedule and cost-to-complete analysis. The utility "will work with the Georgia Public Service Commission to determine the best path forward for our customers," he said, which could include abandoning the project.
Georgia Power owns about 46% of the project, with a group of municipal utilities making up the balance.
Last month, Southern CEO Thomas Fanning indicated the utility would need $3.7 billion to complete the project. While Toshiba has agreed to pay about that amount, the utility company agreed to not pursue additional funding should the project go further over budget.
The agreement specifies the timing and form of payments from Toshiba; the company's first payment is due in October. A service agreement between Georgia Power and Westinghouse engineering, procurement and licensing support, and Westinghouse intellectual property needed to complete Vogtle.
The companies said the agreement will take effect after "approval of the bankruptcy court and rejection of the current engineering, procurement and construction contract by Westinghouse." An interim assessment agreement, which has allowed progress to continue on the construction site, has been extended through June 22.
Similarly, in South Carolina, SCANA’s V.C. Summer plant is three years behind schedule and more than a billion over budget. Summer’s interim construction agreement with Westinghouse runs to June 26.
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