Southern wants to finish new nuclear units despite rising costs, delays

Modules are lowered inside the Unit 3 containment vessel during construction of the new units being added at Plant Vogtle near Waynesboro, Ga.
Modules are lowered inside the Unit 3 containment vessel during construction of the new units being added at Plant Vogtle near Waynesboro, Ga.

Georgia Power Co. told state regulators Thursday that it should finish building two new nuclear reactors at Plant Vogtle, despite delays expected to nearly double their ultimate price tag.

Southern Nuclear, which is building the new Westinghouse AP1000 reactors for Georgia Power, Dalton Utilities, Oglethorpe Power Corp., and the Municipal Electric Authority of Georgia, said in a regulatory filing that completing the unfinished units will cost more than $8 billion in extra funds - about half of which must come from Georgia Power ratepayers - and brings the total cost of the two units to a record high $19 billion.

The utility expects to finish building and activate units 3 and 4 at Plant Vogtle by November 2022 - about two years beyond its previous estimates and five years later than its original estimate.

The new units are expected to boost Georgia Power rates to retail customers by as much as 10.3 percent. But the utility said about 5 percent of that increase is already factored in rates because of the pre-payment of some of the costs for the new reactors.

"Today, the total cost of electricity from Georgia Power is significantly below the national average, and when the project is completed, we expect that the new units will help keep energy bills competitive," Georgia Power President Paul Bowers said.

In a statement, the company called the recommendation "the most economic choice for customers" and better than either abandoning the project or switching it to a natural gas-fired power plant.

"The two new units at Plant Vogtle will be in service for 60 to 80 years and will add another low-cost, carbon-free energy source to our already diverse fuel mix," Bowers said.

Georgia Gov. Nathan Deal praised the recommendation to finish the two new reactors at Plant Vogtle, calling the units "a new clean energy source for Georgians."

"I'm extremely pleased to learn the co-owners of Plant Vogtle Units 3 and 4 have recommended completion of construction," Deal said.

But critics of the Vogtle project quickly condemned Georgia Power's recommendation to keep going on the project, whose costs have soared with each year of delays.

"It is not a good deal for Georgia ratepayers," said Liz Coyle, executive director of Georgia Watch, a consumer advocacy group. "I believe it is clearly uneconomic, and it is the (state utility regulator's) responsibility to require the least-cost option."

Georgia Power and its parent firm, Southern Company, have been studying what to do with the troubled project since the late-March bankruptcy of a key contractor, Westinghouse Electric.

Georgia Power, which has been spending about $50 million a month keeping construction going since the bankruptcy, said Thursday that it has picked the global engineering and construction firm of Bechtel to complete construction of the two-reactor expansion of a nuclear power plant.

"This is a critically important project for the nation and we're honored to be chosen," said Barbara Rusinko, president of Bechtel's government services and commercial nuclear power business.

The recommendation to go ahead is contrary to the judgment of other utilities in the South whose officials decided to halt similar nuclear projects in South Carolina, citing the Westinghouse bankruptcy and other risks.

A month ago, SCANA and Santee Cooper decided to abandon the nearly identical V.C. Summer project in South Carolina because of rising costs of the $14 billion project, falling demand for electricity, construction delays and Westinghouse's bankruptcy.

Duke Energy cited similar reasons last week for ditching a less-advanced nuclear project in South Carolina that also depended on Westinghouse's reactor designs.

The Tennessee Valley Authority, which originally planned to build the Westinghouse AP1000 reactors at its unfinished Bellefonte plant in Alabama, abandoned their plans for the new reactors a decade ago.

The Vogtle Electric Generating Plant, located near Waynesboro in eastern Georgia near the South Carolina border, is jointly owned by Georgia Power (45.7 percent), Oglethorpe Power Corporation (30 percent), Municipal Electric Authority of Georgia (22.7 percent) and Dalton Utilities (1.6 percent).

Dalton Utilities has already spent $143 million on the new reactors at Plant Vogtle, but utility president Tom Bundros, a former Southern Co. finance official and chief financial officer at Dalton Utilities, said the long 60- or even 80-year life of the new reactors will give Dalton clean and attractive power for decades to come.

Dalton Utilities has paid back most of its debt and is pre-paying, rather than capitalizing, most of the expense of building the new Vogtle units.

Like units 1 and 2, which also had cost overruns, Bundros said he is confident the new units will ultimately prove to be a good deal for Dalton Utilities.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.

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