Georgia Power slows pursuit of another nuclear project

Georgia Power’s parent company is delaying initial planning for another new nuclear power project as it wrestles with growing troubles for a massive one already underway.

Southern Company chairman and chief executive Tom Fanning said Wednesday the company will hold off until it resolves issues in the delayed expansion of Plant Vogtle near Augusta. Consumers face the potential for higher power bills as Vogtle’s costs grow.

But Fanning, in an interview with The Atlanta Journal-Constitution, reiterated the company’s long-term faith in both nuclear energy overall and the Vogtle project’s value for consumers.

“We remain committed to nuclear as a dominant solution in the future to the nation’s energy portfolio,” Fanning said.

Southern has been a vocal advocate for U.S. nuclear expansion, even as interest from some other utilities has cooled. Others in the industry are watching the company’s progress on Vogtle, in part because of decades-old memories of massive cost overruns and delays in nuclear projects throughout the nation.

The two new reactors at Vogtle are the first newly licensed U.S. nuclear power units in 30 years.

Last year, Georgia Power chief executive Paul Bowers told The Atlanta Journal-Constitution there was a “very high probability” the company would ask state regulators as soon as this spring to let it take initial steps toward building still more nuclear in the state.

But when asked about it in an AJC interview Wednesday, Fanning said, “Before we move forward on new nuclear, I think it makes sense for us to resolve these issues” at Vogtle.

Construction costs are on pace to rise at least hundreds of millions of dollars beyond Georgia Power’s initial share of $6.1 billion. Contractors have warned the project will be delayed three years beyond its original schedule.

Fanning said even if the delays happen, they “will have minimal impact on rates to customers.”

But regulators and Wall Street have grown uneasy.

Under contract provisions, Georgia Power might be able to collect a maximum of $240 million in liquidated damages from its contractors if delays are as long as the firms have warned, Fanning said Wednesday in a conference call with analysts.

That money might not come easily. The owners of Vogtle, including Georgia municipal electric companies and electric cooperatives, are locked in lawsuits with the contractors.

Fanning told analysts he believes there also are financial disputes between the two biggest contractors, Westinghouse Electric Co. and Chicago Bridge & Iron.

Given the challenges, it isn’t surprising Georgia Power would want to hold off consideration of another nuclear project, said Chuck Eaton, the chairman of Georgia’s energy regulator, the Public Service Commission.

“To go forward with another project of this magnitude and not have the issues resolved I think would be very difficult,” Eaton said. But “nuclear has to be part of the mix,” he said, to have a stable energy source, help comply with future emissions restrictions and sidestep the price volatility of natural gas.

Given the current challenges at Vogtle, “the operative word is uncertainty,” said Paul Patterson, a utility analyst with research firm Glenrock Associates. “It is only prudent that more clarity be achieved” before pursuing another big nuclear project.

When Georgia Power’s Bowers addressed the idea of another nuclear project last year, he said a site had not been decided, and he said the planning would not lock the company into building new reactors.

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