Vogtle nuke cost could top $25B as decision time looms
- The total cost of the Vogtle nuclear plant expansion is likely to top $25 billion dollars and could reach over $27 billion, according to a Southern Co. filing with the Securities and Exchange Commission.
- The utility reported it expects to pay between $9.8 billion and $10.9 billion for its 45.7% share of the Vogtle plant, taking into account guarantee obligations from Toshiba. The earliest in-service dates for the two reactors have now been pushed back to Feb. 2021, and Feb. 2022, respectively.
- News of the cost increase came two days after South Carolina utilities abandoned construction of two new units at the V.C. Summer plant, the only other nuclear facility being built in the country. Southern plans to present a recommendation to regulators on whether to complete the Vogtle plant later this month.
New cost numbers from Southern are building concern across the power sector that the Vogtle plant could meet the same fate as V.C. Summer, marking the end of a "nuclear renaissance" some analysts predicted when the plants were proposed nearly a decade ago.
According to Southern's most recent 8-K filing with the SEC, its subsidiary Georgia Power has already spent $4.5 billion on the nuclear plant expansion. Add in financing costs and expected expenses, and the utility figures it would pay up to $10.9 billion to finish the plant. Canceling the project would cost an expected $6.8 billion.
Those numbers only account for Georgia Power's share of the plant, however. Assuming the other owners have similar financing costs, the total cost for the plant could rise to $25 billion in a low-cost scenario, and reach over $27 billion in a high cost scenario. Southern estimated the plant would cost about $14 billion when it proposed the project in 2008.
Southern owns 45.7% of the Vogtle plant and three municipal utilities — Oglethorpe Power (30%), MEAG Power, (22.7%) and Dalton Utilities (1.6%) — own the remaining shares. A Southern Co. spokesperson confirmed the cost calculations but said the company could not speak to other owners' costs.
The owners wouldn't pay all of that $25 billion themselves. In June, Toshiba agreed to pay the owners $3.68 billion whether the plant is completed or not. Its subsidiary, Westinghouse, was a main contractor on both the Vogtle and Summer plants and went bankrupt earlier this year amid delays and cost overruns at the plants.
If Southern chooses to forge ahead, it expects to finish Unit 3 of Vogtle between Feb. 2021 and March 2022. Unit 4 would be finished between Feb. 2022 and March 2023.
When first proposed, Southern planned to finish the reactors in 2019 and 2020, respectively. Construction is currently 44% complete, the company said.
The new numbers will figure into cost calculations that Georgia Power plans to submit to regulators late this month, Southern CEO Tom Fanning said on a Wednesday earnings call.
"Ultimately, the final decision will rest with the Georgia PSC," Fanning said.
Southern's cost numbers add to a tough week for the U.S. nuclear industry. On Monday, SCANA and Santee Cooper announced they would abandon construction of two new units at the V.C. Summer plant, which had seen its expected cost swell from an initial $11.5 billion to more than $25 billion.
At a subsequent regulatory hearing on the plant, SCANA CEO Kevin Marsh said the Trump White House failed to respond to requests for support of the nuclear project. Due to delays, it and the Vogtle project risked missing out on federal tax credits for nuclear power, which are slated to phase out in 2021.
- SEC Form 8-K, Southern Co.
- Southern Co. Earnings call presentation, Q2 2017
- The Wall Street Journal Tab swells to $25 billion for nuclear-power plant in Georgia
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