Plant Vogtle, PSC Staff Consultant says project may not be “economic” to complete

The Georgia Public Service Commission (PSC) met Thursday to consider continued funding approval for construction (thus far) on Plant Vogtle reactors 3 and 4. The PSC was asked to approve about $222 million in costs already incurred by Georgia Power.

But for the most part, the thoughts of many at the hearing surrounded the future of the project. Georgia Power announced Wednesday it is assuming control of the project by late July, meaning it will manage construction, etc., after taking over from Westinghouse which has gone bankrupt. Westinghouse (whose parent company is now Toshiba) is the designer and builder of the AP1000 reactor necessary to the project.

A news release from Georgia Power says “the scope of the service agreement includes engineering, procurement and licensing support from Westinghouse, as well as access to Westinghouse intellectual property needed for the project.”

Georgia Power’s news release also indicated that “it is working to complete a full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for customers.”

Meanwhile, a report from the PSC’s own consultants (Philip Hayet and Lane Kollen, hired for evaluation of the Vogtle project) indicates that more delays might take place along with increased costs and that in some scenarios, finishing the project isn’t necessarily a good economical choice for customers. The report indicates a worse case scenario could see another delay of  36 months (project completion estimated in June of 2022 and June of 2023, six years behind schedule) and possibly an additional $3 billion in costs for Georgia Power. One part of the report reads “With a 36-month delay and $3 billion in added capital costs, even with (certain stipulations in place) it would be uneconomic to complete the Vogtle Project.”

The report goes on to say another scenario creates even more uncertainty for rate payers but also said “once Georgia Power completes its evaluation and provides its results and work papers to Staff, Staff will review and develop its own economic analysis.”

Georgia Power tells us that some of this report is hypothetical.  It also tells us that Toshiba, the parent company of Westinghouse has guaranteed their work per an agreement which protects customers and guarantees that Toshiba will pay $3.68 billion back to co-owners.

Meanwhile, watchdog groups continue to watch what some are now calling the “Vogtle Vortex.” The Southern Alliance for Clean Energy (SACE) has estimated the project cost continuing to climb for Georgia Power (there are two other partners but Georgia Power’s share of the project is about 47 percent.)  Sara Barczak from SACE says they have estimated that Georgia Power’s cost alone (including projected financing and taxes associated with that financing) could rise from the original estimate of about $6.1 billion to $13.9 billion.  She also said SACE estimates that the total project cost (for all three partners) could go from about the $14 billion originally estimated to nearly $29 billion.

 This is SACE’s own estimate and not verified by any PSC numbers or staff.

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