After a contentious negotiation period, protracted by delays and key contractor bankruptcies, Georgia Power Co. has entered agreements with the chief contractor at the Plant Vogtle nuclear expansion and its parent company to take over management of the project to build two nuclear reactors at the site.
A service agreement calling for Georgia Power and affiliate company Southern Nuclear to take over the work is subject to the approval of the board of directors at Westinghouse Electric Co., which filed for bankruptcy in March 2017.
A second agreement between Georgia Power and Toshiba Corp., Westinghouse’s Japan-based parent, affirms Toshiba’s guarantee of $3.68 billion to Georgia Power. The first payment under the new agreement is due from Toshiba in October.
The agreements will allow the construction activity at the project site to continue, during the management transition, said Paul Bowers, chairman, president and CEO of Georgia Power.
The new Vogtle reactors were supposed to eventually supply clean power for 1.5 million homes. But the project is currently $3.6 billion over budget and almost four years behind the original schedule.
In the meantime customers of Southern Company subsidiary Georgia Power already pay a Vogtle-related surcharge that adds about $100 a year to the average residential bill, with the ultimate effect on ratepayers yet to be determined.
“We are continuing to work with the project’s co-owners to complete our full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for our customers,” Bowers said.
The addition of two nuclear reactors at Plant Vogtle has been beset with cost overruns and delays, a scenario that was further complicated when Westinghouse filed for bankruptcy.
Southern Co. CEO Tom Fanning said during last month’s annual shareholders meeting the company likely will decide in August whether to continue or stop the project; and the elected members of the Georgia Public Service Commission eventually will determine the actual construction costs – both environmental and financial — to be taken on by ratepayers.