A day after its key contractor filed for bankruptcy, Georgia Power on Thursday said it is looking at all options for what to do with its unfinished Plant Vogtle nuclear project.
“Every option is on the table,” Georgia Power attorney Kevin Green told members of the Georgia Public Service Commission, which regulates the Atlanta-based utility.
Westinghouse Electric, which is supplying the reactors and overseeing construction of two new reactors at Plant Vogtle near Augusta, filed for Chapter 11 Wednesday, largely as a result of billions in losses on the Vogtle project and another in South Carolina.
Even before the bankruptcy filing, the Vogtle project had slipped more than three years behind schedule and more than $3 billion over budget.
At the least, the bankruptcy filing is widely expected to lead to more delays and higher costs, ultimately costing most of Georgia’s utility customers more.
Chapter 11 allows companies to remain in operation while restructuring. Georgia Power said it has a deal with Westinghouse to continue work at the site during a 30-day “initial assessment” period that could be extended.
But Westinghouse and its parent, Japanese conglomerate Toshiba, could use the reorganization to cancel its contract with Georgia Power as soon as April 28.
“If they reject the contract, we are prepared to step in,” said Green.
Consumer and environmental groups, meanwhile, said the best course is to shut down the project, which they said is too costly and unnecessary because Georgia Power already has enough power generating capacity.
“We believe the worst alternative would be to continue constructing the plant,” said Liz Coyle, executive director of consumer advocacy group Georgia Watch. “We have been saying for years that these projects are too risky and that too much of the risk is being born by ratepayers.”
Georgia Power and parent Southern Co. contend the new reactors, which have an expected life of 60 years, will help diversify power sources, meet future needs, and help keep rates down in the long run.
If the project is abandoned, customers’ rates could still go up to reimburse Georgia Power and other project partners for the roughly $8 billion in construction costs spent so far, including $3.9 billion by Georgia Power. Consumers already are paying financing costs in their monthly bills, with construction costs to be added later.
Green, the Georgia Power attorney, said the company is studying how much it will cost to complete the new reactors, perhaps under its own management, and whether it still makes sense to finish the job.
“We do know that we have almost $2 billion left … to fund a self-build” but it ultimately may not be the best option, Green said. “We have no pre-conceived notions.”
Other options include converting one or both reactors into natural gas-fired plants, or just completing one reactor.
Environmental and consumer groups said solar or other renewable energy projects should also be considered.
The Vogtle matter took up much of Thursday’s PSC meeting, initially scheduled for other reasons. The elected commissioners, who set cost-sharing formulas that affect rates, expressed frustration at the turn of events.
Commissioner Tim Echols said much of the cost overruns were related to Westinghouse fixing problems with its new AP 1000 reactor design. The design is being used at Vogtle and another project in South Carolina owned by SCANA Corp.
“These people (Westinghouse) want our ratepayers to pay their learning curve,” said Echols. “They were the ones that were going to sell this technology around the world and make billions of dollars.”
Commissioner H. Doug Everett said the bankruptcy has “nothing to do” with Georgia Power’s obligations to the regulator regarding Vogtle.
“We are looking for you to do what you said you would do,” he said.
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