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Georgia cooperatives move to freeze nuclear costs at $8.1B

 Seattle Times, June 18, 2022  By JEFF AMY. The Associated Press, ATLANTA (AP) — One of the owners of a nuclear power plant being expanded in Georgia says it’s shifting overruns to Georgia Power Co. in exchange for giving up a sliver of its ownership.

Oglethorpe Power Corp. which provides power to 38 electric cooperatives, said Saturday that it has exercised a contractual option to freeze its costs for Plant Vogtle at $8.1 billion.

Oglethorpe Power said it would save members at least $400 million. In exchange, Oglethorpe’s ownership share of the two new reactors being built at the plant east of Augusta would fall from 30% to 28%. That would bump Georgia Power’s share of ownership from 45.7% to 47.7%.

Associated Press calculations show the plant will cost at least $30.34 billion.

If costs rise further, Oglethorpe would save more, but give up a larger share of its ownership.

Georgia Power officials have said they don’t expect regulators with the Georgia Public Service Commission to approve customers paying further costs. That means shareholders of Georgia Power’s parent — Atlanta-based Southern Co. — would pay.

Oglethorpe, Georgia Power and Vogtle’s two other owners — the Municipal Electrical Authority of Georgia and the city of Dalton — have been arguing over Georgia Power’s obligations to start absorbing more costs.

It was supposed to begin after more than $2.1 billion in overruns had occurred following a 2018 agreement. Oglethorpe says costs have risen by $3.4 billion since then. But Georgia Power has said COVID-19 was an act of God that drove up costs and delayed work, and it shouldn’t have to pay for that slowdown.

Southern Co. has acknowledged it will have to pay at least $440 million more to cover what would have been other owners’ costs, and has said another $460 million is in dispute……………………

The 2018 escape hatch was written when Oglethorpe threatened to withdraw from the project, which could have led to its cancellation. Georgia Power first agreed to pay increasing shares of Vogtle’s cost beyond a certain point, costing Georgia Power $180 million without affecting others’ ownership shares. Then the co-owners can freeze costs in exchange for owning less of the generating capacity.

…………….   Some of Oglethorpe Power’s cooperatives have already been charging their members for Vogtle’s construction costs. Oglethorpe President and CEO Michael Smith said the cooperatives remain “deeply invested in the success of these nuclear units” but said 4.4 million member owners had to be protected. Unlike Georgia Power, cooperatives don’t have shareholders to fall back on.

………….  Vogtle’s $30.34 billion cost doesn’t include $3.68 billion that original contractor Westinghouse paid to the owners after going bankrupt, which brings total spending to more than $34 billion.

Vogtle is the only nuclear plant under construction in the United States, and its costs could deter other utilities from building such plants………….

The municipal utility in Jacksonville, Florida, as well as some other municipal utilities and cooperatives in Florida and Alabama are obligated to buy power from the plant……………….   https://www.seattletimes.com/business/georgia-cooperatives-move-to-freeze-nuclear-costs-at-8-1b/

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June 20, 2022 - Posted by | business and costs, USA

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