Georgia Power told state regulators that it wants to keep building two new nuclear reactors at Plant Vogtle, despite a key contractor’s bankruptcy and delays that will nearly double their ultimate price tag.
The Atlanta utility, the main partner in the project, said in a filing Thursday that construction costs to finish the plant will be about $4.5 billion, boosting its total to $8.8 billion.
The ultimate price, including spending by all project partners and financing costs, could go above $26 billion, based on Georgia Power’s estimates for its share. Georgia Power owns roughly 46 percent of the project.
It has said the two new reactors, less than half-finished, can be completed by November 2022 — about two years beyond its most recent previous estimates. They were originally supposed to be done this year.
The utility said finishing the project despite delays and contractor Westinghouse Electric’s bankruptcy makes more sense than other alternatives, including abandoning the project near Augusta, or building a natural gas power plant instead.
“Completing the Vogtle 3 & 4 expansion will enable us to continue delivering clean, safe, affordable and reliable energy to millions of Georgians, both today and in the future,” Georgia Power President Paul Bowers said. “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.”
The Georgia Public Service Commission has final say on the fate of the Vogtle expansion. It is expected to make a decision by February. But most on the five-member PSC board already have indicated they’re reluctant to pull the plug.
Georgia Power and its parent firm, Southern Company, have been studying what to do with the troubled project since the late-March bankruptcy of Westinghouse Electric, which designed the reactors and had become the lead contractor.
In a statement, Georgia Power called forging ahead “the most economic choice for customers.”
In an interview, Bowers said customers will eventually see about a 5 percent increase in rates — or about $84 a year on a typical residential bills — beyond current levels because of the project’s additional costs and delays. Before Westinghouse’s bankruptcy, Georgia Power had projected rates would bump up an additional 1-3 percent.
Residential customers already are paying about $100 a year in up-front surcharges to finance the Plant Vogtle project — an amount that also could eventually roll into their base power rates when the project is finished.
Critics of the Vogtle project condemned Georgia Power’s recommendation.
“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,” said Coyle.
Critics have said the plant isn’t needed, and that Georgia Power and state regulators should also have looked at bigger investments in solar power and energy conservation instead.
Even before the Westinghouse bankruptcy, the project was over three years behind schedule and more than $3 billion over budget. Georgia Power has been spending about $50 million a month keeping construction going since the bankruptcy.
Gov. Nathan Deal said Thursday he is “very pleased” Plant Vogtle’s partners want to finish the project.
“We’ve invested so much, so much of a commitment to that project. I’m pleased the partners all agreed it was something that should go forward. I have told them so, I encouraged them to make that decision and I’m pleased that they did it.”
He added: “Our state is a growing state. Our population continues to expand, and with that will come an expanded use of electricity. The Plant Vogtle project will go a long way toward providing us security in terms of electrical power (for) decades to come.”
The recommendation to go ahead was widely expected, even as other utility partnerships recently decided to halt two similar nuclear projects in South Carolina, citing the Westinghouse bankruptcy and other risks.
Georgia Power officials said they believe the Vogtle project is more robust because it has a bigger customer base to support it and the partners recently hired Bechtel — which finished the Tennessee Valley Authority’s Watts Bar Unit 2 reactor two years ago — as a key contractor.
“We’re confident we can complete (Vogtle),” said Stephen Kuczynski, president of Southern Nuclear, Southern Company’s nuclear arm.
Georgia Power said the total capital cost of the project is now expected to be about $19 billion. That’s well above the original $14 billion estimate when it got the go-ahead in 2009.
That total doesn’t include Georgia Power’s financing costs, expected to total $3.3 billion, or other partners’ financing costs.
While the PSC is considered likely to stick with the project, some commissioners have said they’re worried about a shaky $3.7 billion financial guarantee from Westinghouse’s Tokyo-based parent firm, Toshiba, which also could plunge into bankruptcy.
Bowers said Georgia Power excluded its share of the Toshiba guarantee from its cost estimates, and has taken other steps to offset that risk.
Two weeks ago, PSC Commissioner Tim Echols said the reactors should be built to ensure Georgia utilities have “diversified” energy sources in case natural gas or other energy prices rise in the future.
Commissioners Stan Wise and H. Doug Everett recently said they’re confident Southern Nuclear can oversee continued construction. And Lauren “Bubba” McDonald said he did “not like to see failure,” referring to the project.
“There is a bias to go (ahead with the project) on the commission,” Bowers acknowledged. “But we have to prove our case.”
Georgia Power’s other partners at Vogtle are Oglethorpe Power, the Municipal Electric Authority of Georgia, and the city of Dalton. Together they have spent about $11 billion so far, based on Georgia Power’s spending.
Plant Vogtle also has two older reactors finished in 1987 and 1989, following a construction program also marked by delays and cost increases.
— Greg Bluestein contributed to this report.
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