2017-06-14 / Front Page

All eyes are on Vogtle

First nuclear reactors in over 30 years plagued by delays, cost overruns, bankruptcy


Recent view of Vogtle Unit 3 &4 construction 
Photo courtesy Georgia Power Recent view of Vogtle Unit 3 &4 construction Photo courtesy Georgia Power Already years behind schedule with billions in costs overruns, the construction of two additional nuclear reactors at Plant Vogtle near Waynesboro, Ga., is now facing another major hurdle.

Westinghouse Electric Co., the major contractor which designed and was constructing the reactors along with Chicago Bridge and Iron, filed bankruptcy in March.

According to a MEAG memorandum, the Vogtle coowners — Georgia Power, Oglethorpe Power and MEAG — finalized a new agreement Friday with Toshiba, the Japanese parent company of Westinghouse.

The agreement, approved by the U.S. Department of Energy, affirms the value of Toshiba’s guarantee at $3.68 billion following Westinghouse’s March bankruptcy.

A new service agreement was also finalized which provides for the transition of project management at the Vogtle expansion from Westinghouse to Southern Nuclear and Georgia Power.

The scope of the service agreement with Westinghouse includes engineering, procurement and licensing support, as well as access to Westinghouse intellectual property needed for the project.

An interim assessment agreement, which has allowed progress to continue on the construction site, has been extended to June 22, 2017. The co-owners are continuing to work and complete the full-scale schedule and cost-to-complete analysis and to determine the best path forward.

The addition of nuclear reactor units 3 & 4, began in mid- 2009 and were scheduled to be operational in late 2017 and 2018, respectively will be the first new nuclear generating units in the U.S. in nearly 30 years and will be the first installation of the Westinghouse AP1000 unit.

“We are continuing to work with the project’s co-owners to complete our full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for our customers,” said Paul Bowers, chairman, president and CEO of Georgia Power.

Southern Co. CEO Tom Fanning said during last month’s annual shareholders meeting the company likely will decide in August whether to continue or stop the project.

Georgia Power — acting as agent of the co-owners — is responsible for overall construction oversight and has a 45.7 percent interest in Plant Vogtle. The co-owners include Oglethorpe Power, which serves 38 electric membership corporations owns 30 percent; the Municipal Electric Authority of Georgia, which serves 49 member communities owns 22.7 percent; and the city of Dalton Utilities owns 1.6 percent.

Because MEAG Power will not immediately need all the power the new units will generate, it is selling approximately 70 percent of the output from its ownership share for the first 20 years of operation to the JEA (formerly named Jacksonville Electric Authority) and PowerSouth, which serves portions of southern Alabama and northern Florida.

The Georgia Public Service Commission originally authorized Georgia Power to collect “construction work in progress” (CWIP) fees in 2009, when the commission gave the go-ahead for the Vogtle reactors. Commissioners at that time certified that Georgia Power’s share of the Vogtle project would be about $6.1 billion — $4.4 billion for construction and $1.7 billion in financing costs.

The utility was allowed to start collecting those financing costs in advance of the completion dates through the monthly fee on customers’ bills, which first showed up in January 2011.

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