Oglethorpe Power said this would save members at least $400 million.
ATLANTA (AP) — One of the owners of a nuclear plant being expanded in Georgia said it was transferring overages to Georgia Power Co. in exchange for giving up part of its ownership.
Oglethorpe Power Corp., which supplies power to 38 power cooperatives, said Saturday it exercised a contractual option to freeze its costs for Plant Vogtle at $8.1 billion.
Oglethorpe Power said this would save members at least $400 million. In exchange, Oglethorpe’s ownership stake in the two new reactors under construction at the plant east of Augusta would drop from 30% to 28%. This would increase Georgia Power’s ownership share from 45.7% to 47.7%.
Associated Press calculations show the plant will cost at least $30.34 billion.
If costs rose further, Oglethorpe would save more, but give up more of his property.
Georgia Power officials said they don’t expect Georgia Public Service Commission regulators to approve customers who pay extra charges. That means shareholders of Georgia Power’s parent company — Atlanta-based Southern Co. — would pay.
Oglethorpe, Georgia Power and Vogtle’s other two 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 start after more than $2.1 billion in overruns following a 2018 deal. Oglethorpe says costs have risen by $3.4 billion since then. But Georgia Power said COVID-19 was an act of God that drove up costs and delayed work, and it shouldn’t have to pay for the slowdown.
Southern Co. acknowledged it will have to pay at least $440 million more to cover what would have been other owners’ costs, and said an additional $460 million is in dispute.
Georgia Power spokesman Jacob Hawkins said the company still had a “difference of opinion as to whether the terms of the tender had been met.” He said Georgia Power would respond to Oglethorpe.
Oglethorpe said Saturday the dispute remains unresolved. “However, we expect our partner to honor their commitment and honor the contract signed by all co-owners in 2018,” spokesman Blair Romero said.
The 2018 escape hatch was written when Oglethorpe threatened to pull out of the project, which could have resulted in 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 the ownership shares of others. Co-owners can then freeze costs in exchange for less ownership of production capacity.
Oglethorpe said Saturday it plans to have 618 megawatts of capacity, up from 660 megawatts. Vogtle’s two new units are expected to generate 2,234 megawatts.
Some of Oglethorpe Power’s cooperatives already charge their members for the construction costs of Vogtle. Oglethorpe chairman and chief executive Michael Smith said the co-ops remained “deeply invested in the success of these nuclear units”, but said 4.4 million owner members needed to be protected. Unlike Georgia Power, the co-ops have no shareholders to fall back on.
Smith said the decision to freeze protects “consumers who can least afford to increase their electricity rates, especially in today’s economy.”
Vogtle’s $30.34 billion cost does not include the $3.68 billion that original contractor Westinghouse paid owners after it went bankrupt, bringing total expenses 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, even if they produce electricity without emitting climate-altering carbon emissions.
The Municipal Electrical Authority of Georgia, which owns 22.7% of Vogtle and supplies electricity to municipal utilities, has not yet said whether it will divest part of its ownership to cut costs. MEAG projects it will pay $7.8 billion.
The city of Dalton, which owns 1.6%, estimated its cost at $240 million in 2021.
The municipal utility of Jacksonville, Florida, as well as other municipal and cooperative utilities in Florida and Alabama are obligated to purchase power from the plant.
When the project was approved in 2012, the cost of the reactors was estimated at $14 billion, with the first electricity generated in 2016. Now, the third reactor is expected to come on stream in March 2023 and the fourth reactor in December 2023.