A Unanimous Vote for Vogtle

On December 21, 2017, the Georgia Public Service Commission (PSC) voted unanimously to approve Georgia Power’s request to proceed with the construction of Plant Vogtle Units 3 and 4 in Waynesboro, GA. The decision, originally schedule for February 2018, was moved to December so Georgia Power could take advantage of current tax provisions if the commission decided to not approve the company’s plans to proceed.

Key Details

  • Georgia Power requested approval for a cost increase of $12.2 billion with a 29-month schedule delay, raising the total cost of the project to roughly $25 billion. The new units are now scheduled to come online in 2021 and 2022 respectively, approximately five years behind schedule
  • The commission ultimately approved $10.5 billion of the request, citing a recent $1.7 billion payment made to Georgia Power by Toshiba, parent company of Westinghouse, the now bankrupt former lead contractor for the project. With the approval, the commission required numerous concessions from Georgia Power, including a rebate to customers, solar investment, and an overall reduction in their return on equity for the units of approximately $700 million
  • The decision is also contingent on the extension of the Nuclear Production Tax Credit by Congress, which is scheduled to sunset in 2020 prior to the new reactors coming online. The PSC has left the door open to revisit their decision if the roughly $800 million tax credits are not extended. Lawmakers are expected to address the issue in January 2018
  • The cost of cancelling the project was estimated at $750 million and risked roughly 6,000 construction jobs and approximately 800 permanent positions at the plant
  • The decision to proceed was not without opposition. The PSC staff said the reactors were “uneconomic” to complete and recommended not passing along current costs to ratepayers. Additionally, the Jacksonville Electric Authority -supported cancelling the plant after the utility’s obligation to purchase $1.7 billion worth of power from the new units was cited by Moody’s as a reason for a reduction in their financial outlook from “stable” to “negative”

Implications

The decision by the PSC to move forward with construction is historic for the commercial nuclear industry in the United States. Plant Vogtle Units 3 and 4 will be the first new nuclear units completed in more than three decades. To build support from those opposed the Commission’s decision, recent project success will need to continue through remainder of construction and commissioning over the next five years.

Additional Resources

Georgia PSC: Commissioner Echols Motion on Vogtle Construction Monitoring Report 17

POWER Magazine: State PSC Puts Vogtle Future in Georgia Power’s Hands

GreenTech Media: Georgia Regulators Vote to Move Forward With the Vogtle Nuclear Project

Augusta Chronical: Georgia Public Service Commission Vote Allows Plant Vogtle to Proceed

This report is part of ScottMadden’s Nuclear Minute series. To view all featured Nuclear Minutes, please click here.

Additional Contributing Author: Hank Bowden

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