Georgia Power received unanimous approval from the Georgia Public Service Commission (PSC) to complete Vogtle 3 & 4 near Waynesboro, Georgia – the nation's first new nuclear units in 30 years.
The new units are co-owned by Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities, and are the only new nuclear units currently under construction in the United States. Expected online in November 2021 (Unit 3) and November 2022 (Unit 4), the units will generate enough emission-free electricity to power approximately 500,000 homes and businesses.
"The decision to complete Vogtle 3 & 4 is important for Georgia's energy future and the United States," said Paul Bowers, chairman, president and CEO of Georgia Power. "The Georgia Public Service Commission has shown leadership in making this complex and difficult decision and recognized that the Vogtle expansion is key to ensuring that our state has affordable and reliable energy today that will support economic growth now and for generations to come."
Today's decision followed months of review and evaluation of a unified recommendation presented to the Georgia PSC on August 31 by the Vogtle co-owners. The recommendation was based on the results of a comprehensive schedule, cost-to-complete and cancellation assessment that was prompted by the bankruptcy of former primary Vogtle contractor Westinghouse in March and the subsequent rejection of the fixed-price contract. The decision continues to protect customers with new penalties for delays and cost increases in addition to penalties included in the previous stipulated agreement approved earlier this year by the Georgia PSC. Under this amended structure, shareholders will see a significant impact of approximately $750 million through November 2022 and the company has agreed to further reductions if the project does not meet the revised and approved in-service dates. Additionally, as a result, the amount paid by customers will be reduced by more than $1.7 billion during the construction period.
"Our responsibility is to our customers first and we remain focused on fulfilling our commitment to them to deliver a new energy source that will put downward pressure on rates for 60 to 80 years once the new units are on line," added Bowers.
From the beginning of the Vogtle expansion, Georgia Power has worked to pursue all available benefits for customers and minimize the impact of the new units on electric bills. In September, the company announced a new conditional commitment of approximately $1.67 billion in additional loan guarantees for the project from the U.S. Department of Energy (DOE) illustrating renewed federal support for the project. Most recently, the company received 100 percent of parent guarantee funds available from Toshiba years earlier than expected and will use every dollar to benefit customers. The parent guarantee payments from Toshiba, in addition to the penalties in place for the company, are contributing approximately $2.75 billion which will reduce the total cost of the project.
The company also continues to actively support legislation that would allow the Vogtle project to continue to qualify for advanced nuclear production tax credits if the units are placed in service after January 1, 2021. Today, after including anticipated customer benefits from federal production tax credits, interest savings from loan guarantees from the DOE and the fuel savings of nuclear energy, the projected peak rate impact to Georgia Power retail customers is approximately 10 percent, with 5 percent related to the project already in rates – well below original projections of approximately 12 percent.
Final approval and issuance of the additional loan guarantees by the DOE cannot be assured and are subject to the negotiation of definitive agreements, completion of due diligence by the DOE, receipt of any necessary regulatory approvals, and satisfaction of other conditions.
Construction has continued uninterrupted at the Vogtle site following Westinghouse's bankruptcy in March with all Vogtle co-owners working together to maintain the project's momentum. Southern Nuclear, the nuclear operating subsidiary which operates the existing units in Georgia, is now the project manager at the site with global construction firm Bechtel managing daily construction efforts. Progress is steady and evident, illustrated by multiple recent achievements such as the placement of new shield building panels for both units, placement of the 52-ton CA02 module for Unit 4 and the installation of the first steam generator.