The price of the nuclear power plant doubles to $ 28.5 billion as other owners pull out

ATLANTA The cost of building two nuclear reactors in Georgia is now $ 28.5 billion, more than double the original price, and the other Vogtle power plant owners argue that Georgia Power Co. sparked an agreement that Georgia Power committed to a greater proportion of the financial burden.

Atlanta-based Southern Co. announced in its quarterly earnings announcement on Thursday that Georgia Power’s stake in the third and fourth nuclear reactors at the Vogtle plant rose to a total of $ 12.7 billion, up from $ 264 million. Dollar equals. Together with the cooperative and municipal utilities project, Vogtle’s total costs have now more than doubled compared to the original plan of 14 billion US dollars.

Opponents have long warned that the exceedances would be sky high. Liz Coyle, executive director of Georgia Watch consumer group, said the price was “outrageous” but predictable.

“We said you couldn’t build it for what you say,” she said of Georgia Watch’s opposition to the project when the Georgia Public Service Commission initially approved the new reactors.

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The total cost is actually higher than $ 28.5 billion, not counting the $ 3.68 billion that contractor Westinghouse repaid to owners after bankruptcy. After approval in 2012, the first electricity should be generated in 2016.

The company and regulators insist that the first new U.S. reactors in decades are the best source of clean and reliable energy for Georgia. Opponents say other options are cheaper and better, including natural gas or solar.

Southern Co. also announced Thursday that Vogtle’s other owners say Georgia Power has reached an agreement to pay a larger share of the ongoing overruns, the cost of which the company estimates at up to $ 350 million. Southern Co. said it did not believe Georgia Power had crossed the cost threshold but had signed an agreement to extend talks with the other owners on the matter.

Georgia Power owns 45.7% of the new reactors, while Oglethorpe Power Corp. owned by the cooperative 30%. The Municipal Electric Authority of Georgia owns 22.7% and the Dalton Utilities owns 1.6%. The Jacksonville Electric Authority in Florida is required to pay some of the cost of MEAG. Several cooperatives and public utilities in Alabama and northwest Florida have agreed to buy electricity as well.

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The higher costs result from more construction delays. Georgia Power announced last month that Unit 3 is not expected to start generating electricity until the third quarter of 2022. This was the third delay announced since May. Block 4 is now to be put into service sometime between April and June 2023.

The company says it is renewing substandard construction and contractors are failing to meet deadlines. Experts hired to oversee the construction work by the Georgia Public Service Commission have long said that Southern Co. set an unrealistic schedule. In August, the US nuclear regulators found that two sets of electrical cables intended for redundancy in Block 3 were not properly separated. Georgia Power previously had to repair a leak in the spent fuel tank of Unit 3.

Georgia Power’s shareholders have paid the cost of the recent overruns, but the company could ask regulators to require customers to pay some or all of those bills.

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Other owners almost walked away in 2018 and only agreed to move on after Georgia Power agreed to protect them from some additional overruns.

Thursday’s filing shows that the other owners now believe the cost threshold has been reached that requires Georgia Power to pay a larger share of the project.

Southern Co. told investors that Georgia Power did not agree to the threshold being reached, but said the owners signed an agreement on October 29 to “clarify” how the 2018 deal will work.

At some point, Georgia Power will have to pay another $ 80 million of the next $ 800 million. After this stage, Georgia Power will have to pay another $ 100 million of the next $ 500 million. At this price, other owners can sell back parts of their ownership interests in Georgia Power.

The $ 350 million price tag suggests that the other owners are arguing that overruns have reached tier three.

On Thursday it was not immediately clear what exactly was being negotiated or when an agreement could be reached. Georgia Power spokesman Jeffrey Wilson confirmed the disagreement, saying “all parties are working constructively” to resolve differences. He didn’t answer any questions. Oglethorpe spokeswoman Terri Statham declined to comment, saying Oglethorpe would provide an update in an investor filing dated Nov. 12. MEAG did not respond to e-mails and calls with requests for comments.

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The Georgia Public Service Commission on Tuesday approved a $ 224 million interest rate hike to pay for the $ 2.1 billion construction cost of Unit 3. That’s a 3% rate hike for retail customers, or $ 3.78 per month on a bill of $ 122.73. It will come into force after Unit 3 has started commercial operations.

Georgia Power’s 2.6 million customers have already paid more than $ 3.5 billion in Vogtle loan costs. Customers of the cooperatives served by Oglethorpe have already paid nearly $ 400 million according to the year-end.

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Follow Jeff Amy at http://twitter.com/jeffamy.

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