The Alvin W. Vogtle Electric Generating Plant in Georgia, the only nuclear power reactors currently under construction in the U.S., got a last-minute save last night as warring partners agreed to new funding terms.
Southern Co. subsidiary Georgia Power, which owns 45.7% of the project, will shoulder more of the costs past a certain level, and agreed to purchase future tax credits at a discounted cost from co-owners Oglethorpe Power Corp. (30%), the Municipal Electric Authority of Georgia (22.7%) and Dalton Utilities (1.6%).
Costs for the two new nuclear reactors have nearly doubled to more than $27 billion. Partners and politicians are worried the costs will trickle down to rural customers’ electric bills, but the sunk costs of halting construction would also be expensive for consumers.
The existing two reactors at Vogtle have been in operation since the 1980s. The new reactors, now expected to come online in 2021 and 2022, are five years behind schedule and $13 billion over budget. The Vogtle owners have been struggling since the designer and lead construction contractor, Westinghouse Electric Co., filed for bankruptcy in March 2017.
The Department of Energy has paid the project’s owners $5.6 billion of an $8.3 billion loan guarantee for the project. The Trump administration has promised the project another $3.7 billion if construction continues. But if the project were stopped, the DOE would demand an accelerated repayment schedule.
John Sneed, executive director of the DOE Loan Programs Office, had said in a letter to project leaders that his agency acknowledges continuing construction is a “commercial decision” but that the owners must realize Vogtle’s “profound impact on the U.S. nuclear industry.” He added: “The decision each owner makes should be made with an understanding of the ripple effect this project is already having, including job creation and the positive signal of the continued value of commercial nuclear power in our country.”
The Vogtle project has created 7,000 jobs in Georgia.
A Scana Corp. project to add two reactors to the a nuclear station in South Carolina was abandoned last year because of high costs and due to complications related to Westinghouse’s bankruptcy. In 2012, Southern and Scana became the first companies to gain approval to build U.S. reactors in more than 30 years. But the predicted U.S. nuclear renaissance has wilted in the aftermath of Japan’s Fukushima nuclear accident.