The final vote needed for work to continue on a troubled Georgia nuclear reactor project is not coming easily.
Oglethorpe Power late Monday said it would give conditional support to completing the project at Plant Vogtle only if cost controls are agreed upon by the other three owners: Georgia Power Co., MEAG, and the city of Dalton, Georgia.
The cooperative said it has given the owners several options it would accept in return for a vote to continue construction.
Oglethorpe said one scenario that it would approve is a cap on the completion cost that includes the recently announced $2.3 billion increase, plus an additional $800 million for contingency. Both amounts would be added to the base budget approved in late 2017.
The co-owners agreed to give Oglethorpe more time to take a final vote, setting a deadline of 5 p.m. Tuesday, Sept. 25.
Oglethorpe said “overruns” have expanded its share of the project’s budget from an initial estimate of $4.2 billion to approximately $7.25 billion.
The coop owns 30% of the twin reactors, which are about 67% complete.
Affirmative votes from owners of at least 90% of the Vogtle project are needed to move forward in the wake of the latest cost increase.
MEAG, which owns 22.7% of the project, voted unanimously Monday for work on the reactors to continue with no strings attached to its decision such as a cost cap. Dalton, a 1.6% owner, has also voted to continue its participation.
To finance its costs to date, MEAG has issued $2.9 billion of Project J, M and P Vogtle revenue bonds and $1.2 billion of U.S. Department of Energy loan guarantees outstanding as of Dec. 31, 2017.
Georgia Power Co., an investor-owned utility with 45.7% ownership stake, is heading up the work on behalf of the owners. Southern Nuclear Corp. is managing the project. Both firms are owned by Southern Co.
“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,” said Oglethorpe Power President Mike Smith.
Because Southern Co. controls Southern Nuclear, Smith said Southern Co. should be willing to bear the risk of future budget increases, not Oglethorpe’s members.
Oglethorpe and its electric cooperative member companies, Smith said, believe in nuclear power as a reliable source of clean, carbon-free electric generation that could benefit the region for 60 to 80 years.
“However, they recognize it would not be in their electric consumers’ best interests to continue building a project with uncapped, unchecked expenses,” Smith said. “Capping our costs, and by extension the costs borne by our…members, is a reasonable request and a prudent business decision that would allow the project to move forward.”
Georgia Power recently said that it would absorb most of its share of the cost increase, which is $1.1 billion. GPC also said that it might seek to recover $366 million allocated to contingency from its customers, although that would require approval from the Georgia Public Service Commission.
GPC said Monday night that without Oglethorpe’s affirmative vote the project will be canceled, and that the co-op is demanding concessions to avoid obligations that it undertook when it became an owner of the project.
Oglethorpe responded by calling GPC’s statement “a misinformation campaign” and that it still hopes the Plant Vogtle expansion will become a reality and that workers on the project will not lose their jobs.
“However, we cannot abdicate our duty to our members,” Oglethorpe said.
When it agreed to remain a co-owner of the two reactors a year ago, Oglethorpe said, an agreement between co-owners provided them with “project adverse events” requiring a vote, such as the recent increase in the construction budget.
“So, in seeking to cap costs before agreeing to move forward, we are exercising our co-owner agreed upon rights, which are well known among all partners,” Oglethorpe said. “We believe we are being common-sense protectionists of our member-consumers, regardless of tremendous business and political pressure because it is simply the right thing to do.”
In a Sept. 19 letter, 20 Georgia lawmakers told the owners that the ever-escalating cost of the Plant Vogtle expansion was having an “unfair impact” on their constituents, who are members of electric municipal cooperatives that get power from the Municipal Electric Authority of Georgia.
The letter said GPC’s plan to absorb the increase “puts a disproportionate cost burden” on public power owners and their customers, and that the co-owners should agree to a cost cap prior to voting on whether to continue construction.
“Our local utilities don’t have the luxury of shareholders to absorb these additional costs and will to increase rates even higher,” lawmakers wrote. “This approach is unfair and anti-competitive.”
