The site for two proposed nuclear reactors at Plant Vogtle is little more than two large holes in the ground, but an independent construction monitor already has warned of brewing troubles over who will pay for cost overruns.
“There’s a big fight coming up,” said nuclear engineer William Jacobs, who will present his report to the Georgia Public Service Commission Thursday.
Jacobs said Georgia Power and the three other utilities involved in the project already have failed to meet milestone construction dates and noted potential change orders that "could significantly impact the direct construction cost." Jacobs, whose job is to alert state utility regulators to such changes, said in a recent report that it's too early for Georgia Power to put a dollar figure on any cost increases.
He also said the utility doesn't agree that it's responsible for paying for them.
Commissioner Stan Wise said he understands Jacobs' concerns and will ask questions to "find out whether it's related to anything of a magnitude of something we can do something about."
"We're paying awfully close attention to this," Wise said. "This is an exceptionally large project and I don't think anybody would expect that a project of this magnitude was not going to have any blips, whether or not it was material costs, labor costs, scheduling or reviews by the Nuclear Regulatory Commission."
Georgia Power, along with Oglethorpe Power, the Municipal Electric Authority of Georgia and Dalton Utilities, entered a consortium agreement to build two reactors at Plant Vogtle and share the electricity that comes from them. The first reactor is scheduled to start producing electricity in 2016, the second in 2017. Georgia Power officials say there is plenty of work ongoing at the site now, but the consortium continues to wait on a key permit from federal regulators before it can begin major construction.
Georgia Power owns the largest percent of the project at 45.7. Oglethorpe owns 30 percent, followed by MEAG (22.7 percent) and Dalton (1.6 percent).
Regulators are keeping a close watch on Vogtle, where the first two reactors completed in the late 1980s, overran their projected budget by $8 billion. Separate from Jacobs’ concerns, the PSC still is weighing whether Georgia Power’s parent, Southern Co., should bear some of the costs if they go above a certain threshold.
A contract stipulates who pays for what changes to the project and some of those costs may be spread out to each utility on a proportional basis, a Georgia Power spokeswoman said. The contract includes set dollar values, which is one reasons why Georgia Power doesn’t believe there wil be a budget increase at this time.
“We are trying to make sure that we manage all of the cost pressures that are related to it,” spokeswoman Carol Boatright said.
Any cost increases on Georgia Power's part have to be approved by the PSC, said Boatright. If that happens, the amount then gets passed along to customer bills.
“The PSC would have the opportunity to review it before it would go into base rates,” Boatright said.
Georgia Power also is the agent for Dalton Utilities for this project, according to Don Cope, the company's president and CEO.
"Our contracts require that we pay our portion of the costs [and] participate in an advisory and ex officio role," Cope said.
In Jacobs' report, he said that an operating license may not come until early 2012, a few months after its projected date. The delay is related to issues with the reactor that Georgia Power wants to install. Federal regulators have asked reactor manufacturer Westinghouse for additional analysis on parts of the new reactors' design, which may push back the schedule.
That, combined with previous delays, mean that at the least, the first reactor may not be completed on time, Jacobs said. Officials from the utilities disagree.
"With any construction project, there's going to be bumps in the road," said Greg Jones, a spokesman for Oglethorpe Power. "We have no reason to think that the project is not on schedule."
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