Disputed costs at Vogtle rise

Georgia Power and a group of municipal and cooperative electric companies are building twin 1,100-megawatt reactors, the first in the United States to win permits in 30 years. The total expected cost of the project is $14 billion, but potential cost overruns at Vogtle, located in Waynesboro in east Georgia, continue to grow, according to the recent Southern Co. regulatory filing.

Delays in getting federal licensing approvals for the new reactor design and then for the entire project have been cited as the chief culprit.

Because of the dispute with contractors over the additional costs, “the owners are evaluating whether maintaining the currently scheduled commercial operation dates of 2016 and 2017 remains in the best interest of their customers,” the filing said. The total amount of the cost overruns could be well over $900 million; Georgia Power owns 45.7 percent of the project, so its share is $425 million, the latest filing said. Originally the overrun was projected at $400 million when the issue was first made public in April.

At this point, that amount doesn’t affect customers, who are paying down the financing costs of Georgia Power’s $6.1 billion share of the project through a monthly fee on their utility bills.

But the utility warned that “if these costs ultimately are imposed upon the owners, Georgia Power would seek an amendment to the certified cost” of the project. The Georgia Public Service Commission would have to improve any cost increases and decide whether customers should pay for them.

Meanwhile, Georgia Power maintains it is not responsible for the commercial claims made by Westinghouse and The Shaw Group. Negotiations could go on for months, the utility’s parent, Southern Co., said in the quarterly financial filing.

“The $425 million number was supplied by the Contractor, and that Georgia Power has not agreed with the amount of these proposed adjustments or that the owners have responsibility for any costs related to these issues,” Georgia Power said in a statement.

The dispute is separate from a lawsuit Westinghouse and Shaw filed last month. In that suit, the contractors say the Georgia Power and the other utilities owe money for additional expenses that came from backfilling two excavation sites there.

Georgia Power continues to negotiate with Shaw and Westinghouse over that and other disputes, known as change orders, some of which have gone unresolved for months. The utility expects additional claims — either coming from the vendors or the project’s owners — to arise during the remainder of construction, Southern’s regulatory filing said.

The reactors had been expected to open in the spring of 2016 and 2017. An independent construction monitor said in a recent report that those dates have slipped several months.

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