2017-12-27 / Front Page

Vogtle project clears PSC

Construction site of Plant Vogtle Unit 3 and Unit 4 reactors near Waynesboro. Construction site of Plant Vogtle Unit 3 and Unit 4 reactors near Waynesboro. (Publisher’s note: News pertaining to the construction of Plant Vogtle Units 3 & 4 is important to ALL electrical customers in Southwest Georgia. Each of the coowners of the project, and their customers, along with Georgia Power’s shareholders have a vested financial interest in the project.)

Following months of debate and public hearings, the Georgia Public Service Commission unanimously approved a motion Dec. 21 allowing construction of the plant Vogtle’s two additional nuclear reactors to continue.

Regulators adopted a proposal by Commissioner Tim Echols that approves Georgia Power’s revised cost request and schedule largely as is, with some additional incentives designed to incentivize project completion.

The Plant Vogtle Units 3 and 4 Project consists of two 1,100 MW Westinghouse AP1000 nuclear reactors being constructed near Waynesboro in Burke County.

Westinghouse, which was manufacturing the project’s AP1000 reactors, declared bankruptcy in March pushing completion of the Vogtle project and a similar V.C. Summer Plant in South Carolina into economic peril. The South Carolina project did not survive the financial stress and has been cancelled.

Earlier this month, Toshiba, Westinghouse’s parent company, came through with the remaining $3.2 billion of a $3.68 billion guarantee it made after Westinghouse went bankrupt. According to Georgia Power, the payment reduces the cost of the project by $1.7 billion.

Georgia Power told the PSC in August the two new reactors should be finished by 2022. That puts the project five years behind schedule and up to $9 billion over original estimates. It’s been estimated the new reactors could cost up to $25 billion.

The PSC’s decision reportedly places the financial burden of a lengthened schedule and increased costs for the two-reactor expansion on ratepayers’ shoulders.

A 2009 law allows the Georgia Power and its partners in the project, MEAG and Oglethorpe Power, to collect project costs upfront from ratepayers. Georgia Power is the only utility to impose those fees.

Plant Vogtle is owned by Georgia Power (45.7%), Oglethorpe Power Corp. (30%), MEAG Power (22.7%) and Dalton Utilities (1.6%). The existing reactors at Vogtle were brought online in the late 1980s. They were the last reactors built in the U.S.

The PSC had earlier announced the final decision would be made in February. However, Commission Chairman Stan Wise sped up the decision timeline this fall alongside the Republican tax bill, because a lower corporate tax rate changes the possible abandonment deduction if the project dead-ends, saving ratepayers close to $150 million. Although that tax provision made it through, an extension of nuclear credits offering Vogtle about $800 million over several years did not. Nuclear advocates are hoping lawmakers reintroduce the credits in a later bill.

The Georgia PSC made its latest Vogtle decision on the assumption that tax credits for nuclear would be extended and urged Congress to take action.

A report filed Dec. 19 by PSC staff, who are independent from the elected commissioners, recommended canceling the project.

The report found that if the project exceeds $8.9 billion in “all-in” costs from Georgia Power, the nuclear project will cost more than an alternative combined cycle power plant. Georgia Power’s latest estimate puts costs at over $10 billion for its 45.7 percent stake in the project.

In 2013, the projected construction cost of the units was about $14 billion, with about $6.1 billion coming from Georgia Power.

Supporters of the project argue that Georgians have already dumped so much cash into the project that it would be even more detrimental to cancel.

Several PSC members argued that the project is also necessary to ensure resource diversity and serve as a hedge against future naturalgas prices and the intermittency of renewables.

Continuing Vogtle Units 3 and 4 “is costeffective at its revised schedule and revised cost” with certain modifications, said Echols at the hearing. “Staff finds otherwise after its analysis. But everyone agrees that both analyses depend heavily on the forecast of future natural gas prices... I am not willing to trust anyone’s snapshot forecast today of future gas prices as a basis for abandoning the nearly $5 billion we already have invested in this 60 to 80-year asset.”

The Vogtle project marks the development of the nation’s first new nuclear reactors since the 1979 Three Mile Island accident in Pennsylvania. The two existing units at Vogtle went online in the late 1980s, but construction had been underway for them since 1974.

Plant Vogtle’s operating license was extended for 20 years in June 2006.

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