ATLANTA, Dec. 21, 2017 /PRNewswire/ -- Georgia Power today 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.
About Georgia Power
Georgia Power is the largest electric subsidiary of Southern Company (NYSE: SO), America's premier energy company. Value, Reliability, Customer Service and Stewardship are the cornerstones of the company's promise to 2.5 million customers in all but four of Georgia's 159 counties. Committed to delivering clean, safe, reliable and affordable energy at rates below the national average, Georgia Power maintains a diverse, innovative generation mix that includes nuclear, coal and natural gas, as well as renewables such as solar, hydroelectric and wind. Georgia Power focuses on delivering world-class service to its customers every day and the company is consistently recognized by J.D. Power and Associates as an industry leader in customer satisfaction. For more information, visit www.GeorgiaPower.com and connect with the company on Facebook (Facebook.com/GeorgiaPower), Twitter (Twitter.com/GeorgiaPower) and Instagram (Instagram.com/ga_power).
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this communication is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the projected schedule for the completion of construction of Plant Vogtle Units 3 and 4, expected rate impacts and other future actions related to Plant Vogtle Units 3 and 4. Georgia Power cautions that there are certain factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Georgia Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Georgia Power's Annual Report on Form 10-K for the year ended December 31, 2016, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of any failure to extend the in-service deadline for federal production tax credits; the impact of any failure to amend the DOE loan guarantee to allow for additional borrowings; state and federal rate regulations and the impact of pending and future rate cases and negotiations; the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; effects of inflation; the ability to control costs and avoid cost overruns during the development construction and operation of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed; the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; advances in technology; legal proceedings and regulatory approvals and actions related to Plant Vogtle Units 3 and 4, including Georgia Public Service Commission approvals and Nuclear Regulatory Commission actions; interest rate fluctuations and financial market conditions and the results of financing efforts; changes in The Southern Company's or Georgia Power's credit ratings, including impacts on interest rates, access to capital markets, and collateral requirements; the impacts of any sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on foreign currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the benefits of DOE loan guarantees; and the effect of accounting pronouncements issued periodically by standard setting bodies. Georgia Power expressly disclaims any obligation to update any forward-looking information.
SOURCE Georgia Power
For further information: Media Contact: Georgia Power Media Relations, (404) 506-7676 or (800) 282-1696, www.georgiapower.com