Update: Owners of the Vogtle plant on Wednesday agreed to continue construction. Utility Dive's original story on the negotiations follows.
The fate of the only nuclear plant under construction in the United States was supposed to be decided yesterday, but is still up in the air as owners debate how to manage cost overruns.
Oglethorpe Power voted Monday night to continue construction of the Vogtle nuclear project in Georgia, but attached conditions that must also be accepted by other owners of the plant. The exit of one major owner would mean the project would be canceled.
Oglethorpe, which owns 30% of the project, wants a cap on the project's costs to its ratepayers and a guarantee that future cost overruns would be borne by Southern Co., a co-owner in the plant. The owners faced a 5 p.m. (EDT) deadline Tuesday to reach an agreement, but have since extended their negotiation period to 5 p.m. Wednesday.
Oglethorpe's conditional vote Monday night did not resolve the Vogtle crisis but extended the uncertainty one more day in what now appears to be a war of words and wills between it and fellow plant owner Southern Co.
Oglethorpe's board late Monday voted to stick with the project, but the move is only binding on its own actions. In conditions attached to the vote, the Georgia municipal utility shifted the focus to Southern subsidiary Georgia Power, which owns 45.7% stake in the troubled project.
The Municipal Electric Authority of Georgia (MEAG Power), which has a 22.7% stake in Vogtle, on Monday voted to continue its participation in the troubled nuclear project. A fourth, minor partner, Dalton Utilities, had earlier voted in favor of staying in the project.
In its Monday vote, Oglethorpe said it approved continued participation in the nuclear project on the condition that its costs be capped at the current budget estimate, including a recent $2.3 billion increase in costs, and with an additional $800 million to be added to its contingency fund.
Oglethorpe's share of Vogtle's costs is now about $7.25 billion, up from the original cost estimate of $4.2 billion.
In its statement, Oglethorpe noted that after Westinghouse Electric, the project's construction manager, declared bankruptcy last summer, Southern Co. subsidiary Southern Nuclear Corp. (SNC) took over "control of the site and project oversight" of Vogtle.
That, CEO Mike Smith said, should mean that Southern's investors are responsible for any additional costs at the plant.
"As SNC's owner, Southern Company should be willing to bear further risk of SNC's missed budgets, not our members," Smith said.
Southern Co., in fact, has said that its shareholders, not ratepayers, will bear the cost of its share of a recent $2.3 billion cost overrun. The other owners, however, are public power entities and do not have any parties except their member-ratepayers to bear their share of the project's costs.
Georgia law also allows Georgia Power, as an investor owned utility under the jurisdiction of state regulators, to recover costs associated with Vogtle even if the project is not completed. That law does not apply to public power entities.
A little before midnight on Monday, Georgia Power responded to Oglethorpe's conditions, agreeing to the 5 p.m. extension but noting that a "no" vote by Oglethorpe would "force the project to be canceled."
Georgia Power argues that Oglethorpe agreed to take on the risks of cost overruns when it became an owner of the project.
Oglethorpe is trying "to avoid obligations that it undertook when it became an owner of the project," Georgia Power wrote.
Adding to the pressure on Oglethorpe, Georgia Power includes statements from the heads of both MEAG and Dalton reiterating their renewed support of the project.
In Georgia Power's view, Oglethorpe is demanding "Southern Company shareholders and ultimately Georgia Power customers accept Oglethorpe's risk in the project even though all four co-owners fully understood and voluntarily accepted their own risks when they sought to become an owner at the project's inception."
The Department of Energy also stepped into the debate last week, sending the three major plant owners letters urging them to complete construction.
Meanwhile, JEA, the municipal utility serving Jacksonville, Fla., has put together a power purchase agreement that offers an alternative to power supplied from Vogtle at lower cost.
JEA, which has filed suit to get out of its Vogtle purchase agreement with MEAG, says there is room in the agreement for both MEAG and Oglethorpe.
Spokesman Terri Stratham told Utility Dive via email that Oglethorpe is not considering that option.
If Vogtle is canceled, it would be the second nuclear expansion project scuttled for cost overruns in as many years. Last year, a pair of utilities in South Carolina abandoned construction at the V.C. Summer nuclear plant after years of delays and billions of dollars in unexpected costs.
This post has been updated to reflect the Vogtle owners' agreement to extend the negotiation deadline.