Georgia Power gained a $3.2 billion payment guarantee from the parent of a bankrupt contractor on the troubled Vogtle nuclear reactor work, even as the state’s utility regulators say the long-running construction project is uneconomical due to cost overruns and lengthy delays.
The utility and Toshiba, parent company of bankrupt former Vogtle contractor Westinghouse, agreed to pay all remaining payments by December 15. Project partners Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities so far have received about $455 million for the reactor project which has skyrocketed to nearly $25 billion in expected costs.
The agreement will only become binding upon satisfaction of certain conditions including, but not limited to, approval of Toshiba’s board of directors and receipt of U.S. Department of Energy (DOE) approval.
“We are pleased to have reached this constructive agreement with Toshiba regarding the parent guarantees for the Vogtle project and every dollar will be used to benefit our customers,” said Paul Bowers, chairman, president and CEO of Georgia Power, in a statement. “We remain committed to making the right decisions for our state’s energy future and continue to believe that completing both Vogtle units represents the best economic choice for customers and preserves the benefits of carbon-free, baseload generation for Georgia electric customers.”
Two months ago, the federal government showed its continued and yet conditional support for the construction of two reactors at the Vogtle plant near Waynesboro, Georgia. Secretary of Energy Rick Perry said at the time that commitments for up to $3.7 billion in additional loan guarantees to the owners were available.
“I believe the future of nuclear energy in the United States is bright and look forward to expanding American leadership in innovative nuclear technologies,” Perry said. “Advanced nuclear energy projects like Vogtle are the kind of important energy infrastructure projects that support a reliable and resilient grid, promote economic growth, and strengthen our energy and national security.”
The reactor project at the plant south of Augusta is the first new nuclear plant to be licensed and to begin construction in the U.S. in more than 30 years. The project’s future was thrown into question after the main contractor, Westinghouse Electric Co., declared bankruptcy.
Cost overruns on Vogtle and other reactor sites overwhelmed Westinghouse. During the summer South Carolina utility leaders abandoned work at the V.C. Summer power plant, another site riddled with delays and busted budgets.
The Georgia Public Service Commission may decide Vogtle’s fate by February, according to reports. Some critics have charged that ratepayers who are getting saddled with too much of the cost. Georgia Power said the two reactors could be finished by 2022, despite work not being half finished yet.