The sun rises in the East and sets in the West. And Georgia’s Southern Co. investor-owned utility announces further delays in startup of Vogtle Units 3 and 4, the only nuclear power plant under construction in the U.S.
In its annual financial report issued yesterday (Feb. 16), the company said it will push the startup date for Unit 3 of the two-unit, Westinghouse AP-1000 reactor project to May or June of this year. Earlier, the company projected a startup of the unit in the first quarter of the year. Unit 4 startup is also likely to be delayed, according to the Atlanta-based company, until at least the 2023 4th Quarter, or perhaps (some might consider it likely) into 2024.
Southern said the latest delays would add $200 million to its share of the two-unit project, bringing its 47.5% share to $10.953 billion (or about $23 billion for the full project). Other owners include Oglethorpe Power Corp (30%), Municipal Electric Authority of Georgia (22.7%) and Dalton Utilities (1.6%). POWER magazine reported that “costs reported by MEAG in May last year suggested total spending for the expansion was close to $34 billion at the time.” Oglethorp, a large generation and transmission rural cooperative agency, has also said Southern has understated the Vogtle costs.
When Georgia Power in 2009 announced it would launch the expansion of the existing two-unit nuclear site with the two 1,117-MW Westinghouse reactors they estimated a cost of about $14 billion (with $6.5 in Department of Energy funds) in total for all owners, entering service in 2016 and 2017.
“We’re just trying to get anything we can see right now”
According to Reuters, outgoing CEO Tom Fanning said on a call with investors yesterday, “After careful consideration and given our experience on Unit 3 and the degree of critical work ahead of us, we are further risk adjusting our Unit 4 schedule.” He said the needed work on Unit 3 includes pipe repairs, a valve fix, and improving flow through the reactor’s cooling pumps. He said tests at Unit 4 likely will reveal more problems. “We’re just trying to get anything we can see right now,” he said. Chris Womack, CEO of Southern subsidiary Georgia Power, will become CEO of the parent company later this year.
In its financial report, Vogtle reported a fourth-quarter 2022 $87 million loss (8 cents per share), compared with a loss of $215 million (20 cents per share) in the 2021 fourth quarter. Southern Company reported full-year 2022 earnings of $3.5 billion, ($3.28 per share), compared with $2.4 billion ($2.26 per share) in 2021.
In 2017, a similar two-unit AP1000 new reactor project at SCANA Corp.’s V.C. Summer single-unit site in South Carolina, partnered with state-owned public power system Santee Cooper, also suffering unplanned cost escalations and budget delays, cratered at a sunk cost of $10 billion. The aftermath included criminal charges and convictions, and the death of SCANA Corp., sold at a bargain basement price to Virginia-based Dominion.
The failure of the SCANA project and the legendary woes at Vogtle have marked the complete failure of Congress to create a “nuclear renaissance” through the 2005 Energy Policy Act. The act provided for up to $8 billion each in “loan guarantees” for new nuclear plants. The idea was to make it easier for nuclear projects to finance new projects, as many previous lenders, burned by nuclear project failures, avoided lending money to nuclear projects or exorbitant interest rates. It turns out that “loan guarantee” is a politically constructed term to cover the fact that the “guarantees” are actually Treasury funds and loan payments are made to the Treasury.
–Kennedy Maize
To subscribe to The Quad Report, post “subscribe” in the “subject” line in the email address above. I’ll take care of the rest.
Feel free to share issues of The Quad Report.
To Comment: