Utility wants cap on Plant Vogtle costs

Utility wants cap on Plant Vogtle costs
Georgia Power's Plant Vogtle in Waynesboro. (Source: Georgia Power Newsroom)

By Jill Nolin, CNHI State Reporter

ATLANTA – A pair of key Plant Vogtle backers have opted to press forward with the expansion of the southeast Georgia nuclear power plant, but there’s catch: One of them wants a cap on construction costs.

Oglethorpe Power Company, which represents dozens of electric co-ops and owns 30 percent of the project, announced Monday that it would only continue to support the project if a limit is set on the ballooning construction costs.

The Municipal Electric Authority of Georgia, which includes Thomasville, Moultrie and dozens of other city utilities, approved the project earlier Monday. The votes were required after Georgia Power announced another $2.3 billion in cost overruns last month. Vogtle needs buy-in from 90 percent of the owners for work to continue, so Oglethorpe’s support is essential.

Oglethorpe said its proposal is an effort to protect electric co-ops and their rural customers and to hold the Southern Company to its newly revised budget. The utility said it still supports nuclear, just not a project with unchecked expenses.

The utility said its share of the project has grown about $3 billion over the years. The project, which started nearly a decade ago, is billions of dollars over budget and years behind schedule.

Southern Nuclear, which is a subsidiary of the Southern Company, the parent company of Georgia Power, took over the project in Burke County after Westinghouse went bankrupt last year.

“We are hopeful that the Southern Company will agree with a proposal to protect our rural energy consumers in Georgia who should not be responsible for excessive future increases in the costs of this project,” Mike Smith, president and CEO of Oglethorpe Power, said in a statement.

“The Southern Company directly owns and controls Southern Nuclear Corporation (SNC), which has control of the site and project oversight of Vogtle 3 and 4. As SNC’s owner, Southern Company should be willing to bear further risk of SNC’s missed budgets, not our members,” Smith added.

Georgia Power has so far rejected the call for a cost cap. The partners had until Tuesday to reach a deal, and that outcome was not known as of press time.

“Instead of taking a long-term view, Oglethorpe Power is using the vote to try to burden others with its obligations and extract unreasonable concessions,” the company said in a statement.

But others see it differently. Oglethorpe says it would accept the current cost overrun and agree to an additional $800 million in contingency costs.

“If GP doesn’t agree it means they expect more massive cost overruns,” Sen. Chuck Hufstetler, R-Rome, who chairs the Senate Finance Committee, said in a tweet late Monday.

A group of influential state lawmakers, including Hufstetler, sent the utilities a letter last week urging them to put a limit on costs as a way to protect taxpayers and ratepayers. Georgia Power has announced that its shareholders would help absorb its share of the costs – something MEAG and Oglethorpe cannot do.

“Folks in rural Georgia are already suffering and trying to move forward economically, and we certainly don’t want some excessive costs from this plant to be pulling us down,” Rep. Robert Dickey, R-Musella, whose district relies heavily on electric co-ops, said Monday night.

“Still, I think (Vogtle) is going to really give Georgia and all of our electric customers clean, abundant, great power. We just don’t want the cost to be something that will hinder us for decades to come,” Dickey said.

During MEAG’s meeting Monday, there was no mention of a cost cap during the brief public portion of a conference call. The board met behind closed doors for about an hour before spending a few minutes in open session.

“We’ve been asked to make a decision that will impact the lives of people across Georgia, as well as significant portions of Florida and Alabama, for many years to come,” Greg Thompson, who chairs the board, read from a statement just before the vote.

Keith Brady, a board member, cited the need for diversified fuel generation and the potential risk of future carbon emission limits, as well as other factors, when he made the motion to continue to support construction of two additional reactors at Vogtle. MEAG owns 22.7 percent of the project.

Dalton Utilities, which owns 1.6 percent, and Georgia Power – the other two partners – had already voted to continue.

Opposition to continuing construction had grown leading up to the votes. JEA, the public utility in Jacksonville, Florida, is trying to back out of a deal with MEAG to buy Vogtle-generated power and had launched a robust public pressure campaign to influence MEAG’s vote. Some environmental and consumer advocacy groups were also urging the utilities to pull out of the project.

But on the other side, proponents include political heavy hitters such as Gov. Nathan Deal, who wrote in a letter to the utilities that “walking away at this point would be breaking our promise.” Even several of the state lawmakers who pushed for a cost cap said they still saw value in the project.

Jill Nolin covers the Georgia Statehouse for CNHI’s newspapers and websites. Reach her at jnolin@cnhi.com.

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