SACE | Southern Alliance for Clean Energy
More Cost Increases for Southern Company’s Delayed Plant Vogtle Reactors
Vogtle utility owners, lead contractor announce major changes to nuclear project
Contact: Jennifer Rennicks, SACE, 865.235.1448, Jennifer@cleanenergy.org
Atlanta, Ga. (October 28, 2015) ///PRESS STATEMENT/// Just a week before Georgia Power witnesses are set to testify before the Georgia Public Service Commission (PSC) on the 13th semi-annual Vogtle Construction Monitoring report, significant project management changes and major cost increases were announced that will negatively impact customers for the already over budget two nuclear reactors under construction at Plant Vogtle near Waynesboro along the Savannah River.
A statement late Tuesday from Southern Company (parent company of Georgia Power) announced a $350 million cost increase for their share of the project due to the recent settlement reached among the Vogtle utility owners and lead contractor, Westinghouse, who have been in litigation for several years over approximately $1.2 billion in disputed cost increases to the project. Georgia Power customers’ rates will reportedly increase an “average less than 1 percent per year until the project is complete,” which is at least 39-months delayed, now expected in June 2020 for Unit 4. Customers are already paying an additional 9.4 percent on their monthly bills for the Nuclear Construction Cost Recovery (NCCR) costs due to anti-consumer state legislation passed in 2009 to incentivize building new reactors. Over $1.2 billion in pre-collected financing costs have been charged to ratepayers and the financing costs represent the largest share of the project’s cost overruns. The Vogtle project, originally estimated to cost approximately $14.1 billion, is now estimated to cost more than $17 billion.
Westinghouse also announced on Tuesday that they acquired subcontractor CB&I (Chicago Bridge & Iron), the lead subcontractor that has also experienced major problems with module construction since the beginning of the project, even after taking over for Shaw. Years into construction, Westinghouse is now bringing in Fluor Corporation to manage the four Toshiba-Westinghouse AP1000 reactor projects under construction – two at Plant Vogtle and two at SCANA’s V.C. Summer in South Carolina.
“These announcements are shocking and customers once again are going to suffer with higher bills for this troubled project unless the Commission starts paying attention to the red flags that have been waving in front of them for years now and does something to protect consumers instead of Georgia Power and their shareholders,” said Sara Barczak, High Risk Energy Choices Program Director with the Southern Alliance for Clean Energy (SACE). “Revelations such as these, including an overhaul apparently of the project management, must be closely scrutinized and questioned and we intend to do just that at next week’s hearing.”
The public can sign up to speak at the meeting; a sign-up sheet will be available. Written comments are also accepted. Public comments should reference “Docket 29849” and may be submitted online via http://www.psc.state.ga.us/content.aspx?c=/commissioners/, by regular mail to the PSC or by phone at (800) 282-5813.
Originally Vogtle reactor Unit 3 was scheduled to come online April 1, 2016 and Unit 4 one year later but estimates from Georgia Power are now June 2019 and June 2020 respectively, representing a 39-month delay. But expert witnesses for the PSC have identified additional delays as serious construction challenges remain. The current certified cost for Georgia Power’s share of the project is approximately $6.113 billion. In the 13th VCM report the Company’s cost estimate is approximately $7.453 billion, not including this recent $350 million increase. Georgia Power is 45.7 precent owner in the project (remaining utility partners are Oglethorpe Power (30%), MEAG (22.7%) and the City of Dalton (1.6%)). Oglethorpe announced a $230 million increase due to the litigation settlement; collectively the settlement with Westinghouse cost the utility owners an estimated $760 million.
Find more information about Plant Vogtle’s expansion here.
Founded in 1985, the Southern Alliance for Clean Energy promotes responsible energy choices that work to address the impacts of global climate change and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org.