nuclear-news

Georgia’s utility customers will pay up for delays in nuclear plant project

Since Southern Co. subsidiary Georgia Power is a regulated utility, its 2.4 million customers must pay for the project and could be on the hook for reimbursing the company for cost overruns.

The project is being built using borrowed money, so construction delays might increase financing costs and ultimately raise the pricetag for utility customers.

Federal officials have not yet given the project key approvals
necessary to start major construction work, 

Watchdog says Southern nuclear plant faces delays Bloomberg, By RAY HENRY, 7 Dec 11 The Southern Co. continues to face “significant challenges” building the country’s first brand-new nuclear plant on time and without exceeding its share of the roughly $6 billion budget, a state watchdog said in a report released Monday.

The construction of two new reactors at Plant Vogtle near Augusta, Ga. tests whether the nuclear industry can build without the long delays and enormous cost overruns that plagued the industry decades ago.
Since Southern Co. subsidiary Georgia Power is a regulated utility, its 2.4 million customers must pay for the project and could be on the hook for reimbursing the company for cost overruns.

Company officials planned to have the first of the new reactors
effectively complete by April 2016, but that schedule has now slipped
five months, said nuclear engineer William Jacobs Jr., a construction
monitor for the Public Service Commission, in his report. Many of
Jacobs’ concerns were essentially unchanged since he issued similar
findings in June. The project is being built using borrowed money, so
construction delays might increase financing costs and ultimately
raise the pricetag for utility customers.

So far, the companies building the expanded Plant Vogtle have failed
to meet many key deadlines, Jacobs said…….
Federal officials have not yet given the project key approvals
necessary to start major construction work, which is another source of
delays. The U.S. Nuclear Regulatory Commission is still considering
whether to approve the design of Westinghouse Electric Co.’s AP1000
reactor, which would power the new plant…..
“Until the magnitude of the costs associated with these potential
change orders and the responsibility for these costs is known, the
forecast cost for the Project is uncertain,” Jacobs said.

Building costs skyrocketed during construction of the two existing
reactors at Plant Vogtle. The utility originally estimated the project
would cost $660 million, but the final bill reached nearly $9 billion
by the time the reactors started producing commercial power in 1987
and 1989. http://www.businessweek.com/ap/financialnews/D9RF27G80.htm

December 8, 2011 - Posted by Christina Macpherson | business and costs, USA