Decision on Vogtle Project May Come in February 2018

State regulators in Georgia could decide the future of the troubled Vogtle nuclear expansion project in February 2018, and have scheduled a series of hearings in December of this year to discuss spending for continued construction of two new units at the plant near Waynesboro, Georgia.

The Georgia Public Service Commission (PSC) on September 19 voted unanimously to accept a scheduling order on the plant’s expansion, setting up hearings for Dec. 11-14, 2017. The PSC has said it expects to make a ruling in the case by February 2018; the Atlanta Business Chronicle today reported the commission will issue a decision on the project’s fate on February 6. Consumer and environmental groups immediately criticized Tuesday’s vote, saying continued construction at Vogtle is not in the best interests of ratepayers.

Companies working on the project to build twin AP1000 reactors at Vogtle filed a recommendation with the PSC on August 31 to continue construction, despite costs expected to move far above $20 billion. Cost overruns at the project helped lead to the bankruptcy earlier this year of Westinghouse, the former engineering, procurement, and construction contractor at Vogtle. Southern Co. subsidiary Georgia Power and the other project owners—Oglethorpe Power, Municipal Electric Authority of Georgia (MEAG Power), and the City of Dalton—in their recommendation to continue the project also announced they had selected global engineering, construction and project management company Bechtel to take over daily construction, replacing Fluor Corp.  Bechtel is working under Southern Nuclear, a Southern Co. subsidiary that operates the existing units 1 and 2 at Plant Vogtle.

Liz Coyle, executive director of Georgia Watch, a consumer advocacy group, said in an email Tuesday to media: “I am very disappointed that the Commission voted unanimously to approve the proposed scope and schedule for considering Georgia Power’s request to continue constructing Vogtle 3 &4 with a price tag now double the original. By the time the PSC finally makes a decision on whether or not continuing the project is in the best interest of Georgia Power customers, another half a billion dollars will be sunk in construction costs.”

PSC Questions, But Supports Project

PSC staff in June issued a report saying the Vogtle project may never be viable. However, PSC commissioners have supported Georgia Power’s efforts to continue construction. Georgia Power owns just less than half the project.

Jacob Hawkins, a Georgia Power spokesman, on Tuesday issued a statement reiterating that the company is following its requirements for Vogtle Construction Monitoring (VCM). “We filed the 17th VCM Report and recommendation to move forward with the Vogtle expansion on August 31, including responses to specific issues requested by the Georgia PSC such as the reasonableness of the revised cost and schedule forecast,” Hawkins said in an emailed statement. “It is ultimately up to the Georgia PSC to determine the structure of each VCM proceeding—we will continue to work with the Georgia PSC and all parties through the VCM process.”

Kurt Ebersbach, an attorney for the Southern Environmental Law Center, said in a letter to the PSC that the word “reasonable” regarding Vogtle costs presents a problem, because it has a specific meaning in Georgia law governing approval of the project’s construction costs. In his letter, Ebersbach—writing on behalf of Interfaith Power & Light, a San Francisco, California-based religious group that promotes energy conservation and renewable energy—said “Under no circumstance should [the order] include the word ‘reasonable’ in reference to the new cost forecast and/or schedule.”

Ebersbach also said “We have a more basic objection to the proceeding as a whole, as it is currently envisioned because it appears designed to limit, if not eliminate, shareholder risk in a way that is contrary to Georgia law and prior stipulations.”

The PSC has approved $222 million in expenditures for Georgia Power, which has a 45.7% stake in the Vogtle project. Georgia Power has said it expects its investment will total between $9.8 billion and $10.9 billion. Oglethorpe Power owns 30% of the project, and has asked for $1.6 billion from the Department of Energy (DOE) to support construction.

Payments Set for Project Owners

Southern Co., the parent of Georgia Power, in June finalized an agreement with Toshiba, the parent company of Westinghouse, which required Toshiba to pay the project owners $3.68 billion ($1.7 billion to Georgia Power) between now and July 2021, whether or not the Vogtle project is completed. The first payment of $300 million is expected in October.

The PSC approved the Vogtle expansion in 2009; at the time, the project reportedly had an estimated cost of $14 billion. Construction problems have put completion years behind schedule. If the project continues the first of the two new reactors is scheduled to come online in 2021, with the second beginning operation in 2022, both more than five years after the original completion dates.

New U.S. nuclear projects have faced a host of problems in recent years. The V.C. Summer project in South Carolina, also impacted by the Westinghouse bankruptcy, was abandoned earlier this year, although SCANA Corp. later withdrew its abandonment petition in August, saying it wanted more time to assess the future of the project.

Dominion Energy earlier this month suspended work on a third reactor at its North Anna Nuclear Generating Station in Virginia. Dominion was working with GE-Hitachi to develop a new 1,600-MW reactor and said it had spent $600 million on the reactor’s development. Dominion said its estimated cost of the reactor project was about $19 billion; the Nuclear Regulatory Commission issued a license for the reactor earlier this year. Despite suspending the North Anna project, Dominion said it plans to apply to relicense its two operating nuclear units at North Anna along with its two units at its Surry Nuclear Power Plant in Virginia.

Darrell Proctor is a POWER associate editor. (@DarrellProctor1, @POWERmagazine)

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