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Price of Vogtle expansion could increase $900 million

Friday, May 11, 2012 12:50 PM
Last updated 8:06 PM
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Southern Co. subsidiary Georgia Power and other Plant Vogtle owners are disputing proposed adjustments that could add $900 million to the $14 billion cost of completing two new reactors in time for their scheduled debuts in 2016 and 2017.

In a new filing with the U.S. Securities and Exchange Commission, Southern Co. – whose subsidiary Georgia Power owns 45.7 percent of the Vogtle nuclear project – said it has not agreed to adjustments proposed by the the contractor consortium that includes Westinghouse and Stone & Webster Inc.

The company and Vogtle co-owners Oglethorpe Power (30 percent), Municipal Electric Authority of Georgia (22.7 percent) and Dalton Utilities (1 percent) also dispute whether the owners are even responsible for those added costs, which would amount to $400 million for Georgia Power alone.

“The Consortium’s estimated adjustment attributable to Georgia Power (based on Georgia Power’s ownership interest) is approximately $400 million (in 2008 dollars) with respect to these issues, which include an initial estimate of costs for efforts to maintain the projected in-service dates of 2016 and 2017 for Plant Vogtle Units 3 and 4,” the company wrote.

The Vogtle expansion, for which final permits were issued in February, has already encountered issues that could affect costs and schedules, the filing said. One such issue was a recent finding by the Nuclear Regulatory Commission that rebar installed at the site is not consistent with design standards. Discussions are under way to resolve that issue.

The dispute over the adjusted cost, and the issue of who is responsible for paying any overage, could wind up in court.

“Georgia Power expects negotiations with the Consortium to continue over the next several months, during which time the parties will attempt to reach a mutually acceptable compromise,” the filing said. “If a compromise cannot be reached, formal dispute resolution, including litigation, may follow.”

Environmental groups critical of the project say the cost increases are no surprise.

“The new admission about problems at Vogtle follow recent reports about grading issues under the reactor’s foundation, improperly installed rebar that has slowed the project, and dozens of amendments requested to the federal license for the two new Vogtle reactors,” said a statement issued by Georgia Women’s Action for New Directions.

Arjun Makhijani, the president of the Institute for Energy and Environmental Research, said efforts to rush such a complex project to completion set the scene for delays and rising costs.

“The cost increase should not be a surprise; rather it is déjà vu all over again,” he said. “It would be much better if construction were suspended until all design issues were resolved.”

The Vogtle units are the first new commercial reactors to be built in the U.S. in almost three decades – and are the first Westinghouse AP1000 units constructed in this country.

China, however, is already building four identical units in its Sanmen and Haiyang nuclear plants.


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Vogtle workers see both reactor projects

Some veterans of the nuclear industry were at the site south of Augusta to see the complex network of rebar and concrete rising out of the ground in the 1970s and ’80s. Now, they are back.
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