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Georgia PSC to review all Vogtle costs to date


In a Surprise Move Georgia PSC Approves “Prudency Review” for $7.453 Billion in Vogtle Costs

Vogtle NPP construction site, July 30, 2015. All photos copyright (c) 2015 - contact for further information.

Vogtle construction – Photo: High Flyer / SRS Watch

With little advance notice the Georgia PSC approved a complete prudency review of all costs for Vogtle Units 3 and 4 incurred to date at its February 18 Administrative Session. On January 28 all the parties to the 13th semi-annual Vogtle construction monitoring review, which included SACE, were expecting to discuss Georgia Power Company’s request to recover the $350 million in litigation settlement costs to its contractors, Westinghouse and Chicago Bridge & Iron and an additional $69 million for costs associated with cybersecurity and onsite security that were not part of the major litigation, but instead a surprise motion by Commissioner Wise expanded the review from just the $419 million to also include over $7.453 billion for the total costs of the project to date. Including the $419 million, this represents an increase in project costs of more than $1.8 billion above the original certified cost in 2009 of $6.113 billion.

The Georgia Commission’s decision to initiate a full prudency review is highly unusual because normal procedures have been completely ignored. Multiple hearings with the presentation of witnesses for cross-examination will likely not occur. To complicate matters the PSC Staff had no advance notice of the prudency review prior to January 28, and likely has no budget for the additional staff and consultants needed to conduct a thorough review. Additionally, the Georgia PSC has an extremely full agenda for 2016 with the Georgia Power IRP filed in January, a full Georgia Power rate case scheduled for July, the review of the merger of AGL Resources with Southern Company and two semi-annual Vogtle construction monitoring reviews.

According to the PSC’s Order, Georgia Power is scheduled to file its responses to a set of questions regarding the litigation settlement and Project costs by April 5. Parties will only have 30 days to file comments and the PSC Staff may conduct discovery and is “authorized to engage in any settlement talks with the Company and intervening parties . . .” over six months. SACE will file a response to Georgia Power’s April 5 filing and plans to be fully engaged in the prudency review process because of the huge financial impact this significantly delayed and over budget project will have on all ratepayers.