Toshiba Agrees to $3.68 Billion Deal to Aid Vogtle Nuclear Construction
A nuclear plant construction project in Georgia that is years behind schedule and billions of dollars over budget has been given a lifeline that at least temporarily eases concerns about its future.
Toshiba, the parent company of Westinghouse, and Southern Company subsidiary Georgia Power, majority owner of Plant Vogtle near Augusta, on June 9 reached a deal in which Toshiba promises to pay Georgia Power $3.68 billion beginning in October 2017 through January 2021. The deal comes in the wake of Westinghouse’s bankruptcy filing in March of this year, and was reached on the same day contractors in Vogtle’s construction filed numerous liens for unpaid bills for their work on the Georgia project as well as the still-unfinished Units 2 and 3 at V.C. Summer Nuclear Generating Station in South Carolina, another Westinghouse AP1000 project.
The latest deal continues the process of moving project management at Vogtle Units 3 and 4 from Westinghouse to Georgia Power. It also provides needed funds for the project, which has been backed by U.S. Department of Energy (DOE) loans of more than $8 billion. DOE has reported the project supports 800 permanent jobs and 3,500 construction jobs.
Paul Bowers, CEO, president, and chairman of Georgia Power, in a statement said “We are pleased with (the) positive developments with Toshiba and Westinghouse that allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power. We are continuing to work with the project’s co-owners to complete our full-scale schedule and cost-to-complete analysis, and will work with the Georgia Public Service Commission to determine the best path forward for our customers.”
“We are happy to have Toshiba’s cooperation in connection with this agreement which provides a strong foundation for the future of these nuclear power plants,” said Southern Company CEO Thomas Fanning in a statement.
A news release from Southern Company, the parent of Georgia Power, said the agreement still must be approved by the bankruptcy court and the associated companies’ boards of directors.
Westinghouse filed for bankruptcy March 29. On May 12, Georgia Power stated it had an agreement in principle to begin taking over the plant, which has had an uncertain future for months. The Vogtle Electric Generating Plant, located in Waynesboro in eastern Georgia near the border with South Carolina, began commercial operation in May 1987. A second unit went online in 1989.
Construction of Units 3 and 4 at the plant began in 2009 but has been plagued by unexpected costs and construction delays, contributing to Toshiba and Westinghouse’s financial woes. The company said costs for its U.S. nuclear projects have been “far surpassing estimates.”
Toshiba on June 10 said it is “still in negotiations” with SCANA Corp. subsidiary South Carolina Electric & Gas Co. and Santee Cooper, owners of the V.C. Summer nuclear project, which also remains under construction. Westinghouse has an interim assessment agreement with the owners through June 26 as they continue to mull the future of that facility.
- Darrell Proctor is a POWER associate editor.