Georgia Vogtle nuclear report: more delays, $1B in extra costs, flaws

There's potentially bad news for virtually anyone who pays an electric bill in Georgia: Once again, it is "highly unlikely" the long-troubled expansion of Plant Vogtle will be completed when scheduled, say state regulatory staff and independent monitors.

According to their recently submitted written testimony, even if Georgia Power does finish on its latest timeline, the nuclear project will be $1 billion over its current budget, which was already billions of dollars higher than when the project began. Construction costs are expected to increase monthly electric bills of customers of Georgia Power and other Georgia electricity providers, virtually all of which have partnered on the massive plant.

Still, the new findings could understate the challenges of the project, the only commercial nuclear power plant expansion underway in the United States. The authors based their assessments on a period before the coronavirus pandemic disrupted the construction site south of Augusta.

Meanwhile, government staff and monitors wrote that they were “shocked” by an “astounding 80%” failure rate for new components installed at the site. The results meant the components, when tested, “did not initially function properly and required some corrective action(s) to function as designed.”

The regulatory staff and power industry experts serving as monitors were assigned by the Georgia Public Service Commission to provide independent analysis. They have been correct in predicting past delays and cost overruns that Georgia Power and parent Southern Company had not yet acknowledged.

Georgia Power spokesman Jeff Wilson, in an emailed statement to The Atlanta Journal-Constitution on Monday, wrote that the company “continues to expect that we will achieve the in-service dates of November 2021 and November 2022 for Vogtle units 3 and 4, respectively. The project is continuing its strategy of utilizing an aggressive site work plan as a tool to help us achieve the November regulatory-approved dates.”

The latest forecast costs remain unchanged, Wilson wrote.

The company did not directly answer questions from the AJC about component failure rates or concerns raised by monitors about the company’s current strategy for the project.

Elected members of the PSC will ultimately decide how much of the project’s costs will be rolled into Georgia Power customers’ bills.

Already, the Vogtle expansion is billions of dollars over its original budget and years behind its initial schedule. The two new reactors were supposed to be in commercial operation by the spring of 2016 and 2017.

The PSC’s public advocacy staff and monitors contend that unrealistically aggressive deadlines and the handling of the project in an especially piecemeal fashion have increased delays and generated “significantly higher cost due to the inherent inefficiencies.”

The schedule pressure and rush to turn components over for testing probably “has contributed to the abnormally high failure rate” of components, they said.

There is some good news, though, from the Vogtle Monitoring Group. It had earlier raised concerns that the schedule rush might compromise the safety of workers and of the plant itself. But the latest testimony is that the personnel safety record “has been more than acceptable, and – due largely to its disciplined approach to the conduct of operations — VMG is reasonably confident that when completed both Vogtle 3 & 4 will meet or exceed the already exceptional safety and operational performance” of Southern’s existing nuclear plants.

Georgia Power has described the Vogtle expansion as the largest construction project in state history. The project lined up billions of dollars in federal loan guarantees and hundreds of millions of dollars in federal tax credits. It received support from both the Trump administration and the Obama administration, which backed nuclear as a carbon-free way to diversify the generation of electricity and limit destructive climate change.

But costs for nuclear construction soared, as critics warned they would, and prices fell for natural gas, which is used as a fuel at some plants that generate electricity. A project nearly identical to Vogtle was killed in South Carolina midstream. Other utilities around the nation shelved plans.

The Vogtle project, which Georgia Power led and has a nearly 50% stake in, has been beset by problems. It has faced quality issues, problems documenting work, delays in completing detailed plans and, eventually, a shortage of workers and the bankruptcy of an overwhelmed contractor. PSC staff now say that, in almost every scenario it considered, the Vogtle expansion will cost ratepayers more annually over the 60-year-life of the units than if carbon-emitting natural gas-burning units had been built instead.

Vogtle’s construction costs have yet to be rolled into the monthly bills of Georgia Power customers. But, for years, ratepayers have been paying in advance for the project’s financing costs and related Georgia Power profits, a measure allowed by the state legislature.

What it means for you

Much or all of the cost of the massive nuclear expansion of Plant Vogtle could end up in the monthly bills of customers of Georgia Power and other electricity providers in the state, virtually all of which are tied to the project. In addition to other cost increases, further delays in completing the work could drive up expenses by $100 million for each additional month. Elected members of the Georgia Public Service Commission decide what gets passed on to Georgia Power’s ratepayers.