House votes to extend tax credits for Vogtle 3 and 4

The U.S. House approved legislation Tuesday that would bolster construction progress at the embattled nuclear expansion projects at Plant Vogtle near Waynesboro and V.C. Summer near Jenkinsville, S.C., if it passes the Senate.

 

The tax credits were originally intended to provide incentives for nuclear construction, but were set to expire in 2020. The projects are already billions over budget and years behind schedule, but the March 29 bankruptcy filing by Westinghouse meant the facilities would almost certainly not be online before the credits expired.

“The tax credits were originally approved by Congress and were set to expire,” said Rep. Rick Allen, of Augusta. “We wanted to make sure that we included the units both at Vogtle and over in South Carolina and that the plants under construction right now received these credits when they are completed, which takes it out beyond 2020.”

Vogtle’s Unit 3 was originally slated to come online in 2016 with Unit 4 following in 2017. Delays, design changes, and other challenges for the first new nuclear facility to be built in the U.S. in over 30 years pushed back deadlines and raised costs.

In 2009, Georgia state legislators passed a law allowing Georgia Power, the majority owner in the Plant Vogtle expansion project, to collect money from customers up front. Called construction work in progress, the company uses it to charge a nuclear tariff to its customers. But, Allen said this extension won’t cost customers anything.

“The tax credits remain at the same level and this extension won’t cost the taxpayers any money,” he said. “It gives the companies the incentive to complete these projects, which is critical.”

Allen said the tax credits were originally installed to encourage companies to establish new business and expand domestic energy production. He said Georgia has been ranked atop the list of best states to conduct business for several years.

“We have abundant power,” Allen said. “We also have economical power, so these two units are critical to continue our economic expansion.”

Earlier this month, Georgia Power announced it reached an agreement with Westinghouse to begin taking over construction and project management at Vogtle. Previously, the agreement with Westinghouse was a turn-key one in which Westinghouse would build the units, then Georgia Power, through sister company Southern Nuclear, would handle operations.

Georgia Power is currently preparing to present future options for the project to the Georgia Public Service Commission. Several options have been noted during PSC hearings, including scrapping one of the units or even converting the entire new construction to natural gas.

However, Westinghouse parent company Toshiba Corp. recently pledged about $3 billion to cover the Westinghouse tab. Paired with the House approval of the tax credit extension, some say the option to finish both units as planned is the preferred route for Georgia Power.

“We are pleased to see the full House approve this bill. We look forward to this legislation continuing to move through the process as production tax credits were intended to support the development of new nuclear in this country and strengthen national security through energy independence and innovation,” said Jacob Hawkins, spokesman for Georgia Power.

“Production tax credits for the Vogtle project are part of an overarching proactive financing strategy and are a direct benefit for customers, offsetting additional costs associated with building the first new nuclear in 30 years.”

Allen said the incentives were in place when the companies started construction and given the nature of circumstances with the Westinghouse bankruptcy, it was important to ensure the incentives were still in place when the plants become operational.

“If they terminate the credits before the plants are operational, then they would have to get that money from somewhere. I’m sure they would then petition the Public Service Commission to look at a different rate structure,” Allen said.

The resolution was adopted by the house and is expected to be taken up by the Senate in coming weeks. According to the White House website, President Trump’s advisors said he would sign the bill if the Senate passed it in current form.

Reach Thomas Gardiner at (706) 823-3339 or thomas.gardiner@augustachronicle.com

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