Georgia Power and its partners in the construction of two new nuclear reactors at Plant Vogtle will file a crucial report later this month on what it would cost to complete the already delayed project and whether it should move forward.
But the situation in Georgia is much different from a similar project in South Carolina that was recently suspended by the companies hoping to build those new reactors, according to the chairman of the Georgia Public Service Commission.
Santee Cooper and South Carolina Electric and Gas Co. announced they are suspending the construction of two new nuclear units at the V.C. Summer Nuclear Station in Jenkinsville, S.C., according to statements from both companies. Santee Cooper said an analysis showed the project would be completed four years later than the most recent estimate, or not until 2024, and would end up costing it $11.4 billion – more than double the $5.1 billion it had originally budgeted for its 45 percent share of the project in 2012. The companies were scheduled to brief the Public Service Commission of South Carolina on Tuesday.
Both the Georgia and South Carolina projects had been hurt by their project contractor, Westinghouse, declaring bankruptcy in March and both planned to use the company’s new AP 1000 technology as part of the expansion, which would be the first new nuclear facilities built in the U.S. in three decades. But there are big and important differences between the Georgia and South Carolina projects, said Stan Wise, chair of the Georgia PSC.
For one, the impact of any rate changes incurred from the costs would be spread over a much larger group in Georgia than those who were bearing the cost in South Carolina, he said. Georgia Power has 2.4 million customers, more than three times as many as the 700,000 under SCE&G, Wise said.
The impact on rates from Vogtle has been less than 5 percent compared to the 18 percent South Carolina customers are paying, he said. The Georgia project also got a much more favorable guaranteed payment for future cost overruns from Westinghouse’s parent company, Toshiba, than the South Carolina project , Wise said. Toshiba’s payment will be $3.7 billion to Vogtle versus $2.2 billion to the Summer project, he said.
Without that, it “would be a deal-killer that we just simply could not continue without the $3.7 billion,” Wise said.
The financial size of Georgia Power and its partners also means they have “substantially more financial reserve and able to bear the risk (more so) than the South Carolina companies,” he said. “It is not a criticism, it just is what it is. It gives us the opportunity to consider this going forward.”
Georgia Power and its parent company, Southern Co., have completed a service agreement with Westinghouse for affiliate Southern Nuclear to oversee the ongoing construction at Plant Vogtle as it completes its analysis and schedule for what it would take to complete the project.
“I certainly understand in the Augusta and Waynesboro and east Georgia area that it’s 5,000-6,000 jobs that are out there and people want to know what could happen,” said Georgia Power spokesman Jacob Hawkins. “We’re making sure our assessment is as comprehensive as possible.”
Once the commission receives that report, its staff will begin working on it and Wise said he expects a decision on whether the project should move forward by early December. One of the outstanding issues that could affect the project, whether to extend production tax credits that could aid the project past its current 2020 expiration date, has been approved by the U.S. House of Representatives but is still awaiting action by the U.S. Senate. That is one of the things that will be included in the analysis, Hawkins said.
But Wise said there is generally a favorable view in Washington, D.C., of the the tax credits and encouraging new nuclear power.
“I believe Congress has continued to be supportive of the extension of the (production tax credits),” he said. “I believe the White House is appropriately supportive of that as well.”
Department of Energy Secretary Rick Perry echoed that at a June news conference.
“This administration believes that nuclear energy development can be a game-changer and an important player in the development of our clean-energy portfolio globally,” he said. “One of the things we want to do at DOE is to make nuclear energy cool again.”
Vogtle’s expansion was originally supposed to be completed this year but revised estimates in the Vogtle Construction Monitoring Report in February projected that the units would come online in December 2019 and September 2020, respectively. At that time, Georgia Power said it had spent $3.9 billion of a projected $5.4 billion as its 45.7 percent share of the project with a total price tag of roughly $11 billion. Those estimates and the costs from the first six months of the year will be updated in the August report, which is due by Aug. 31.
Wise said the final cost of the project won’t be known until perhaps four or five years from now. But after all that has been spent so far, he is hopeful Georgia will see a return on the billions already spent that South Carolina might not.
“I think this commission is generally supportive of continuing this project,” Wise said. “I think it is key to national security. But I think at the same time we have a considerable amount of money put in and steel and concrete and labor on the site. What I believe that Georgians want something for what has already been spent.”
Reach Tom Corwin at (706) 823-3213 or email@example.com.