Georgia Power announces revised schedule, cost forecast for Vogtle units 3 & 4

Rhea-AI Summary

Georgia Power announced a revised schedule and cost forecast for the Vogtle 3 & 4 nuclear expansion project. The in-service dates are now projected for Unit 3 in Q2 2022 and Unit 4 in Q1 2023, reflecting a 3-4 month delay. The total project capital cost has increased by $460 million, with Georgia Power's share at $9.2 billion. Despite challenges, Unit 3's Hot Functional Testing is complete, achieving 99% construction completion. The project aims to provide emissions-free electricity for over 500,000 homes, supporting Southern Company's goal of net-zero carbon emissions by 2050.

Positive

• Unit 3 Hot Functional Testing successfully completed, marking significant progress.
• Total project construction is approximately 93% complete, indicating timely completion potential.
• New units will provide power for over 500,000 homes and contribute to net-zero carbon emissions goal by 2050.

Negative

• Revised project capital cost increased by $460 million, raising concerns about budget overruns.
• In-service dates delayed by 3-4 months for both units, potentially impacting financial projections.

ATLANTA, July 29, 2021 /PRNewswire/ -- Georgia Power today announced a revised schedule and cost forecast for the Vogtle 3 & 4 nuclear expansion project, resulting from productivity challenges and additional time for testing and quality assurance. The company currently projects a Unit 3 in-service date in the second quarter of 2022 and a Unit 4 in-service date in the first quarter of 2023, representing a three-to-four-month shift for each unit. The company has also revised the total project capital cost forecast to reflect this updated schedule – resulting in a $460 million increase to Georgia Power.

"Georgia Power is focused on safety and quality as we complete this project," said Chris Womack, chairman, president and CEO of Georgia Power. "Vogtle 3 & 4 remains a critical investment for the state to provide low-cost, reliable and emissions-free electricity for the state of Georgia for 60 to 80 years. This is too important to our customers, our state and our nation for us not to get it right, and we will."

Georgia Power's share of the total project capital cost forecast is now $9.2 billion, although the company has not sought approval of any capital costs above the $7.3 billion previously approved by the Georgia Public Service Commission. Additionally, there are special protections in place for customers during construction, including a reduction in the company's return on investment for the project. Every month of delay in the project equates to an incrementally lower return, which translates to lower bill impacts during construction. For future, final cost recovery, an open and transparent prudency review is planned near the completion of Unit 4.

"We knew building the first new nuclear units in the U.S. in more than 30 years would be challenging. The project has endured extraordinary circumstances during construction, including the pandemic as the most recent. Through these challenges, we have learned a great deal. Unit 3 Hot Functional Testing has now been successfully completed with no significant issues identified, which is a critical step toward completion," Womack added.

With the completion of Unit 3 Hot Functional Testing, Unit 3 direct construction is now 99% complete, with the total Vogtle 3 & 4 expansion project approximately 93% complete. The completion of hot functional testing marks a significant step towards commercial operations. During hot functional testing, plant systems achieved normal operating pressure and temperature, without nuclear fuel, to verify the successful operation of reactor components and systems together.

Carbon-free energy source
The new Vogtle units are an essential part of Georgia Power's commitment to deliver safe, clean, reliable and affordable energy for customers and play a significant role in supporting Southern Company's goal of net-zero carbon emissions by 2050.

Once operating, the two new units at Plant Vogtle will be able to power more than 500,000 homes and businesses. A diverse fuel mix, including nuclear, is also essential to maintaining a reliable and affordable energy infrastructure that attracts new investment, supports economic growth and creates jobs.

With more than 7,000 workers on site, and more than 800 permanent jobs available once the units begin operating, Vogtle 3 & 4 is currently the largest jobs-producing construction project in the state of Georgia. The project has also been an economic development driver for the region during construction.

About Georgia Power
Georgia Power is the largest electric subsidiary of Southern Company (NYSE: SO), America's premier energy company. Value, Reliability, Customer Service and Stewardship are the cornerstones of the company's promise to 2.6 million customers in all but four of Georgia's 159 counties. Committed to delivering clean, safe, reliable and affordable energy at rates below the national average, Georgia Power maintains a diverse, innovative generation mix that includes nuclear, coal and natural gas, as well as renewables such as solar, hydroelectric and wind. Georgia Power focuses on delivering world-class service to its customers every day and the company is recognized by J.D. Power as an industry leader in customer satisfaction. For more information, visit www.GeorgiaPower.com and connect with the company on Facebook (Facebook.com/GeorgiaPower), Twitter (Twitter.com/GeorgiaPower) and Instagram (Instagram.com/ga_power).

Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the projected cost and schedule for completion of Plant Vogtle units 3 and 4 and expected job creation. Georgia Power cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Georgia Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Georgia Power's Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the potential effects of the continued COVID-19 pandemic; the ability to control costs and avoid cost and schedule overruns during the development, construction, and operation of facilities or other projects, including Plant Vogtle Units 3 and 4, which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale, due to current and future challenges which include, but are not limited to, changes in labor costs, availability and productivity, challenges with management of contractors or vendors, subcontractor performance, adverse weather conditions, shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor, contractor or supplier delay, delays due to judicial or regulatory action, nonperformance under construction, operating, or other agreements, operational readiness, including specialized operator training and required site safety programs, engineering or design problems or any remediation related thereto, design and other licensing-based compliance matters, including, for nuclear units, inspections and the timely submittal by Southern Nuclear of the Inspections, Tests, Analyses, and Acceptance Criteria documentation for each unit and the related investigations, reviews and approvals by the U.S. Nuclear Regulatory Commission ("NRC") necessary to support NRC authorization to load fuel, challenges with start-up activities, including major equipment failure, or system integration, and/or operational performance, and challenges related to the COVID-19 pandemic; the ability to overcome or mitigate the current challenges at Plant Vogtle Units 3 and 4 that could further impact the cost and schedule for the project; legal proceedings and regulatory approvals and actions related to construction projects, such as Plant Vogtle Units 3 and 4, including Public Service Commission approvals and NRC actions; under certain specified circumstances, a decision by holders of more than 10% of the ownership interests of Plant Vogtle Units 3 and 4 not to proceed with construction and the ability of other Vogtle owners to tender a portion of their ownership interests to Georgia Power following certain construction cost increases; the ability to construct facilities in accordance with the requirements of permits and licenses (including satisfaction of NRC requirements), to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; the inherent risks involved in operating and constructing nuclear generating facilities; the ability of counterparties of Georgia Power to make payments as and when due and to perform as required; the direct or indirect effect on Georgia Power's business resulting from cyber intrusion or physical attack and the threat of physical attacks; catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, political unrest or other similar occurrences; and the direct or indirect effects on Georgia Power's business resulting from incidents affecting the U.S. electric grid or operation of generating or storage resources. Georgia Power expressly disclaims any obligation to update any forward–looking information.

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SOURCE Georgia Power

FAQ

What are the new in-service dates for Vogtle Units 3 and 4?

Unit 3 is projected to go in service in Q2 2022, while Unit 4 is set for Q1 2023.

How much has the capital cost for the Vogtle project increased?

The capital cost has increased by $460 million, bringing Georgia Power's total share to $9.2 billion.

What is the current completion percentage of the Vogtle project?

The overall project is approximately 93% complete, with Unit 3 direct construction at 99% completion.

How does the Vogtle project impact Georgia Power's carbon emissions goal?

The new units will support Southern Company's goal of net-zero carbon emissions by 2050.

What are the implications of the delay in the Vogtle project?

Delays may affect financial projections and could lead to increased costs and customer bill impacts.