Legal & Regulatory

DOE Offers Another $3.7 Billion in Loan Guarantees for Vogtle Project

Energy Secretary Rick Perry said in a statement that the “future of nuclear energy in the United States is bright” as his agency on September 29 announced another $3.7 billion in loan guarantees for continued construction of two new nuclear reactors at Plant Vogtle in Georgia.

The Department of Energy (DOE) has guaranteed another $1.67 billion to Georgia Power, $1.6 billion to Oglethorpe Power, and $415 million to three subsidiaries of the Municipal Electric Authority of Georgia. The money is in addition to $8.3 billion already guaranteed by the DOE to support construction of the two AP1000 reactors at the plant near Waynesboro, Georgia. The long-delayed project to add two new units to the two existing reactors at Vogtle has been plagued by construction problems and cost overruns; the current timeline to complete construction is now near the end of 2022. Analysts say the cost for the project will go well above $20 billion.

The project’s main contractor, Westinghouse Electric, filed for bankruptcy in March of this year, citing financial losses from Vogtle and the troubled V.C. Summer nuclear project in South Carolina. The Summer project, in limbo after utilities SCANA and Santee Cooper said they would walk away as cost estimates soared above $20 billion, also involves construction of two AP1000 reactors. The utilities on September 28 said they would cash in a $2.2 billion settlement from Toshiba, the parent of Westinghouse—even though doing so will cost the two companies $171 million—rather than risk not being able to collect guaranty payments that Toshiba agreed in July to make over the next five years for the unfinished project.

Friday’s DOE action is the latest in a flurry of moves concerning both the Vogtle and Summer projects in recent weeks. Those announcements include:

  • Westinghouse on September 25 asked a New York bankruptcy court to stop Georgia Power from terminating Westinghouse’s contract to continue construction at Vogtle. Southern Nuclear, a subsidiary of Southern Co. as is Georgia Power, has taken over as lead contractor at Vogtle after the Westinghouse bankruptcy. Georgia Power said the bankruptcy filing showed Westinghouse had abandoned the project.
  • Georgia’s Public Service Commission (PSC) on September 19 scheduled hearings for December of this year to discuss the project, and commissioners said they expect to decide Vogtle’s future in February 2018. The project’s owners on August 31 filed a recommendation with the PSC to continue construction despite the ballooning costs, and said global engineering company Bechtel would take over day-to-day work at the project site.
  • South Carolina lawmakers, meanwhile, this week called for a criminal investigation into how SCANA and its primary subsidiary South Carolina Electric and Gas Co. (SCE&G) have handled the Summer project, just days after SCANA and Santee Cooper received federal subpoenas asking for documents related to a February 2016 Bechtel assessment report of construction at Summer.

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


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