ATLANTA (AP) — Southern Co. showed signs Friday of better controlling its spending while building a first-of-its-kind nuclear plant, an important development for a project that was supposed to prove the nuclear power industry is financially viable.
Projections released by the Atlanta-based utility show it expects to spend roughly $6.76 billion as its share of the cost to build two more nuclear reactors at Plant Vogtle in eastern Georgia, an effort that is trending $646 million above a government-approved budget. The financial situation has improved compared with last year's estimates that showed the project was trending $737 million over budget, for a total of $6.85 billion.
Controlling spending is critical for the nuclear industry if it wants to prove it can build new plants without the soaring costs that crippled the sector decades ago and pushed utilities to the brink of financial ruin. The latest financial projections suggest that Southern Co. and its partners have slowed the rate of spending growth and are resolving at least some of the problems with its suppliers, contractors and project oversight.
Southern Co. subsidiary Georgia Power owns a 46 percent stake in the reactors, which are expected to cost more than $14 billion when complete, including the investments of all the owners.
"This is a first-mover plant here," said Joseph "Buzz" Miller, the president of nuclear development for Southern Co.'s nuclear subsidiary. "Our level of knowledge and our people and what we're looking at, we've got way more certainty of where we are (compared with) a year ago."
Not everyone watching the project is convinced that costs are being contained. Spending could still increase. The plant's designer, Westinghouse Electric Co., and the building contractor, CB&I, say that Georgia Power and other owners are responsible for an extra $930 million in charges mostly incurred when a federal licensing process ran late. The utility companies deny they are responsible for those costs. The issue remains unresolved.