Is Vogtle the dawn of a new nuclear age or a costly warning sign?

Views of units, from left, and cooling towers 1-4 at Plant Vogtle, in Burke County near Waynesboro, Ga., on Monday, July 31, 2023. Georgia Power Co. announced Monday that Unit 3 at Plant Vogtle, southeast of Augusta, has completed testing and is now sending power to the grid reliably. It's the first new American reactor built from scratch in decades. (Arvin Temkar/Atlanta Journal-Constitution via AP)
Views of units, from left, and cooling towers 1-4 at Plant Vogtle, in Burke County near Waynesboro, Ga., on Monday, July 31, 2023. Georgia Power Co. announced Monday that Unit 3 at Plant Vogtle, southeast of Augusta, has completed testing and is now sending power to the grid reliably. It's the first new American reactor built from scratch in decades. (Arvin Temkar/Atlanta Journal-Constitution via AP)

WAYNESBORO — At the crack of dawn on Monday, dignitaries and power company executives gathered on a rural Burke County hilltop overlooking Plant Vogtle for a celebration that was years delayed.

On a clear day, "Mount Vogtle" offers panoramic views of the power plant's four cooling towers, a dramatic photo op as Georgia Power finally activated Unit 3, the first new nuclear reactor built on U.S. soil in more than 30 years. But as the sun rose, a thick fog rolled in over the Savannah River valley, shielding the plant from view.

The poor visibility surely wasn't what the company had hoped for, but it could be symbolic of the uncertain future now facing the country's nuclear industry — and Georgia Power's customers.

Vogtle Units 3 and 4 were built in hopes of ushering in a nuclear renaissance. Instead, they could be remembered as enormously expensive one-offs. Even if new plants are built to split atoms again in the U.S., they could look vastly different from the East Georgia reactors.

Unit 3 entered service seven years behind schedule, and Unit 4 could be just as tardy by the time it's powered up later this year or in early 2024. Original cost estimates of $14 billion from 2009 ballooned to $35 billion today — and counting — much of it to come out of the pockets of Georgia Power customers. A staff expert for Georgia's energy regulators recently blasted Georgia Power's "inaccurate cost estimates" and "management's continuous, poor judgment" since the Vogtle expansion started.

Vogtle's construction troubles and the bankruptcy of Westinghouse, the designer of the new Vogtle reactors, pushed neighboring South Carolina to end a similar nuclear expansion.

Still, an expansion of nuclear power in the U.S. is seen by some as a vital tool for fighting climate change and building American energy independence.

Each of Vogtle's new reactors will produce enough electricity to power 500,000 homes and businesses, without directly contributing additional heat-trapping greenhouse gases to the atmosphere. Nuclear has other advantages. The reactors can run around the clock, and experts say they are well-suited to supplement expanding portfolios of intermittent wind and solar power.

As concern grows over the rapidly worsening effects of climate change, the U.S. Department of Energy (DOE) says the U.S. needs much more nuclear — and soon — to meet the country's goals to limit global warming.

Right now, the U.S. has roughly 95 gigawatts of nuclear capacity at 54 plants on the electric grid. A recent DOE report estimated the country could need three times that much to achieve net-zero emissions by 2050. That would mean adding the energy equivalent of 100 to 200 more Vogtle-sized units, said Kathryn Huff, the DOE's assistant secretary of nuclear energy.

Huff and other federal officials who spoke to The Atlanta Journal-Constitution acknowledged that is a tall order.

The mostly private, utility-driven U.S. nuclear industry has slipped far behind the state-sponsored programs of China and Russia, as the DOE laid out in a 2020 report. And after Vogtle, there are no other commercial nuclear plants under construction in the U.S., or any signed orders to build new ones.

Huff said it is critical that Vogtle's completion builds momentum for the industry.

"Time is absolutely of the essence, not just for maintaining continuity for the workforce and supply chains, but also for the climate itself," she said.

At a recent town hall at Georgia Tech, DOE Secretary Jennifer Granholm said it was not surprising that Vogtle faced workforce and construction challenges, given that the U.S. has not built a new nuclear plant in decades. But she was optimistic lessons learned from Vogtle would boost the industry.

"Nobody wants to be the first," Granholm said. "Everyone wants to be, maybe, the seventh to learn from the mistakes."

Early signs of trouble

Georgia Power and its partners did go first, however, and customers have been paying more for electricity for years because of it. Rates are still climbing, and figuring out how much higher they will go is only just beginning.

From the earliest days of Plant Vogtle's expansion, opponents of the project and some of the Georgia Public Service Commission's (PSC) own staff warned that Georgia Power's timeline and cost estimates were unrealistic.

The first two Vogtle reactors completed in the 1980s also reached the finish line billions over budget and years late. That the two new units were based on a Westinghouse platform, which had not been built before in the U.S., also raised concerns.

In a review of Georgia Power's very first monitoring report submitted in August 2009, just five months after state regulators greenlit the reactors, PSC staff experts testified that the utility had presented an "incomplete and distorted picture of the project's costs" and was already behind schedule on permitting.

Their warnings proved prescient.

Georgia Power began construction in 2009 without a completed design and by 2012, it was embroiled in multiple legal disputes with construction partners over rising costs. Westinghouse's 2017 bankruptcy led South Carolina to pull the plug on two nearly identical reactors, but Georgia regulators voted to push ahead.

Over the course of the project, PSC staff monitors repeatedly told the commission that low productivity and poor construction quality were persistent problems.

The PSC and state lawmakers also insulated shareholders of Georgia Power's parent, Southern Company, pushing the upfront financing and much of the cost overruns onto ratepayers.

In an interview on Monday, Southern Company President and CEO Chris Womack conceded there were things that could have been done differently. He pointed to the company's decision to enlist a Louisiana vendor to build large components and ship them to the site. That process was supposed to enable speedy, LEGO-like assembly; instead, quality issues led to more delays.

Womack said the next utility that builds a plant will learn from Vogtle.

"I'm bullish that we did the right thing for our customers, we've done the right thing for the state, and we've done the right thing for this country with the work that we've accomplished," he said.

Opponents of the project have a different take.

Sara Barczak was among the chorus of environmental advocates who warned that the ballooning costs that had dogged earlier projects would happen in Georgia — and that customers would foot the bill.

With Vogtle nearing completion, Barczak, the former regional advocacy director for the nonprofit Southern Alliance for Clean Energy, said the project should reveal a different lesson: That nuclear is too expensive and slow to be a viable climate change solution.

"If we're serious about climate change, which many of us are, then this is not the technology to be pursuing right now," Barczak said.

Future nuclear

The federal government has acknowledged that Vogtle's missteps could be making other utilities skittish about building reactors. Even so, the DOE is pumping billions of dollars into advancing nuclear technologies to help spark a renaissance.

If that rebirth does occur, it's unlikely the next units built in the U.S. will look like Vogtle's.

Most utility interest is in small modular reactors (SMRs) with a maximum output between 50 and 300 megawatts — far less than the 1,100-megawatt capacity of each new Vogtle unit.

In theory, SMRs can be built faster and cheaper, and have been billed as a less financially risky alternative to larger units. Earlier this year, the federal Nuclear Regulatory Commission certified its first-ever SMR design for U.S. utilities.

The company behind it, Oregon-based NuScale Power, is working with partners to build a demonstration plant at the Idaho National Laboratory (INL), but, so far,no orders from U.S. utilities for commercial units have been placed.

The government is also funding the development of reactors that use different fuels. A planned experiment at INL testing molten salt as both a coolant and fuel is being spearheaded by Southern Company. Just this week, the DOE announced that an assessment of the project found it would result in no significant environmental impact.

If there is a new frontier in commercial nuclear construction in the U.S., it's possible it will develop not far from Plant Vogtle.

The Tennessee Valley Authority, a federally owned utility that serves 10 million people in seven Southeastern states, including some in Georgia, has been evaluating sites for SMRs, including one known as the Clinch River Site, east of Knoxville. The TVA board has approved $200 million to develop the project, but the rough cost of the units is not known.

In a June interview, TVA officials said they had not made a decision about the project, but have tracked Vogtle closely. Greg Boerschig, a TVA vice president for the Clinch River Project, said the smaller size and lower potential cost of SMRs is appealing.

"As one industry colleague has put it, the decision to build a small modular reactor doesn't put the fate of the company in the balance," he said.

Who pays?

As other states and utilities mull new reactors, Georgia's attention turns to who pays for Vogtle's remaining costs: Georgia Power's customers or its shareholders?

After fuel is loaded into Unit 4, which could happen any day, a set of "prudency hearings" will be scheduled to litigate that question.

PSC staff witnesses have recently taken a more aggressive posture toward Georgia Power, arguing the company's actions resulted in unnecessary costs.

If state regulators allow the company to collect $7.7 billion in Vogtle costs — a figure the company has used in its own modeling — through rates, it could lead to an increase for residential customers of $14.10 per month, on average, for the first five years, according to PSC staff estimates. The monthly increase would drop slightly to $13.20 for the next five years.

On Thursday, Southern reported profit of $1.7 billion during the first six months of the year, down about one-fifth from a year earlier. A warm winter was partly to blame, the company said.

Tom Newsome, the PSC's director of utility finance, said in a hearing last week that Georgia Power "grossly underestimated" the new Vogtle units' cost and that they will not provide any economic benefit to ratepayers. He said customers would have been better served if natural gas plants had been built instead.

"Repeated, materially inaccurate cost estimates are an example of management's continuous, poor judgment over the life of the project and should be taken into account when the commission conducts its prudency review," Newsome said in concluding his testimony.

In a Monday interview, Womack and Aaron Abramovitz, Georgia Power's chief financial officer, disagreed.

"Our analysis and our economics show something different: that this is still the right economic choice for our customers," Abramovitz said.

The five elected members of the PSC will ultimately decide the Vogtle costs Georgia Power or its customers will pay.

PSC Commissioner Lauren "Bubba" McDonald — who initially voted to certify the Vogtle expansion — said Georgia Power would have to prove their case.

"Otherwise, their investors are going to have to take care of it," McDonald said.

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