ATLANTA (AP) — The timeline for building a first-of-its-kind nuclear plant in Georgia has slipped seven months, while the Southern Co. faces a dispute over who should pay for $400 million in unanticipated costs, utility executives said Wednesday.
Southern Co. initially planned on finishing the construction of its first new reactor at Plant Vogtle near Augusta by April 2016 and complete work on the second reactor a year later. But that schedule has slipped to November 2016 for the first reactor and a year later for the second, said David McKinney, a vice president for nuclear construction for the Southern Co.
"We do not currently believe that the April dates are achievable," McKinney testified during a hearing held by the state's Public Service Commission, which regulates the utility.
The nuclear industry has hoped that the Plant Vogtle expansion will prove it can build new plants without the endemic delays that caused big increases in cost of borrowing money to build, a major problem during the last round of nuclear construction. Under state law, the cost of building the new reactors will be paid by the nearly 2.4 million customers of Southern Co. subsidiary Georgia Power.
State utility regulators have authorized Georgia Power to spend just over $6.1 billion as its share of the estimated $14 billion construction project. But there is an increasing risk that Southern Co. will need to increase its budget.
The companies designing and building the power plant — The Shaw Group Inc. and Westinghouse Electric Co. — want Georgia Power to pay an additional $400 million to cover increased costs blamed on design changes and delays, according to the utility's financial filings.
So far, spending on the project remains $28 million under budget, although those estimates from Georgia Power do not account for the potential cost of the disputes with its business partners.
The utility has not accepted responsibility for the extra costs and says the companies designing and building the plant could be responsible for paying all or some of the extra bills, not its electric customers. Under questioning by a commission lawyer, McKinney acknowledged the project may cost more than expected unless the current situation changes.
"I can't say that it's highly likely that the cost would be able to maintain, you know, the current projections without some kind of potential adjustment if those cost pressures continue to mount," he said.
The project passed a major milestone in February when the U.S. Nuclear Regulatory Commission issued the utility a license to build and operate the nuclear plant, the first such license in a generation. Now that the utility has permission to build the reactor, McKinney said it will work on firming up its construction schedule.
Georgia Power reported that it remains in talks with the U.S. Department of Energy to secure $8 billion in loan guarantees for the project. Kyle Leach, the director of resource policy and planning for Georgia Power, said the utility has recently benefited from lower-than-expected interest rates, making it cheaper to borrow the money needed to build the reactors.
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