After four agreement extensions between Westinghouse and Georgia Power at Plant Vogtle, a new operational agreement was reached Friday, including billions in guarantees from Westinghouse parent company Toshiba Corp.
Westinghouse began building the two new units at Plant Vogtle in 2009. The company, installing its own AP1000 reactor designs, cited cost overruns at Vogtle as a major factor in its bankruptcy filing March 29. Westinghouse is also building the VC Summer expansion near Jenkinsville, S.C., and said cost overruns at that plant also contributed to its financial woes.
Units 3 and 4 at Vogtle are years over budget and were originally set to come online beginning in 2016. Current operational deadlines are set for 2019 and 2020, respectively, but executives called those dates “unfeasible.” They faulted the Westinghouse bankruptcy filings for challenging those deadlines.
The expansion is more than $3 billion over budget. During the bankruptcy and operations negotiations, Georgia Power said it would work to hold Westinghouse accountable for financial obligations, including efforts to secure Westinghouse debts from parent company Toshiba. According to a Georgia Power press release, Toshiba guaranteed $3.68 billion in debt for the project.
“We are pleased with today’s positive developments with Toshiba and Westinghouse that allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power,” said Paul Bowers, chairman, president and CEO of Georgia Power. “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.”
The financial guarantees could play a role in Georgia Power’s presentation to the PSC. The utility company is expected to present a cost-to-complete analysis to the commission including plans for the expansion’s future. Options on the table included finishing the nuclear expansion, scrapping the project, and converting it to natural gas. It remains unclear how the Toshiba guarantee will affect that presentation.
“We are happy to have Toshiba’s cooperation in connection with this agreement which provides a strong foundation for the future of these nuclear power plants,” said Thomas A. Fanning, chairman, president and CEO of Southern Company, Georgia Power’s parent company.
Georgia Power has taken over construction operations and the utility company said the agreement includes engineering and licensing support, as well as access to Westinghouse intellectual property needed to finish the project.
The agreement was approved by the Department of Energy and is awaiting approval from the bankruptcy court. The interim agreement has been extended until June 22 to allow the new agreement to be incorporated. The first payment from Toshiba Corp. is due in October.
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