By Tamar Hallerman, The Atlanta Journal-Constitution —
Atlanta-based Southern Company records $920M loss for new nuclear units in 4Q
Southern Company, the electric utility overseeing the beleaguered Plant Vogtle nuclear expansion near Augusta, said Thursday that the project is being delayed once again as costs continue to climb.
Chief Financial Officer Dan Tucker told The Atlanta Journal-Constitution that “inadequate documentation” of construction activities is partially to blame for the company’s updated estimate, which pushes back the planned service dates for its two new nuclear units in Georgia by three to six months.
“The cost and schedule are a function of the time and resources needed to go and remediate that paperwork,” said Tucker.
The plant’s new Unit 3 is now slated to come online between December 2022 and March 2023. Unit 4 is scheduled to be operational between September 2023 and December 2023, he said.
The disclosure came the same morning that Southern announced that it recorded a $920 million financial charge in the fourth quarter of 2021 related to Vogtle. It recorded a nearly $1.7 billion loss for the 2021 calendar year from the project, despite still booking an overall company profit.
It’s just the latest setback for Vogtle, the country’s first new nuclear project to be built in decades that’s years behind schedule and billions over budget. Many expect the rising costs to be shouldered at least partly by Georgia Power’s roughly 2.6 million customers in their monthly bills over the next several years.
Tucker attributed nearly half of the fourth-quarter charge, about $440 million, to a cost-sharing agreement between its subsidiary, Georgia Power, and its partners on the project, which include Oglethorpe Power, the Municipal Electric Authority of Georgia and Dalton Utilities. He insisted that passing on that portion of the bill to Georgia Power’s customers is “100% off the table.”
He said the company has “preserved the right” to return to Georgia’s Public Service Commission, the elected body that regulates Georgia Power, after both Unit 3 and 4 are online to request that other additional costs be covered by rate payers.
But Tucker added that “our financial outlook assumes that none of those costs are borne by Georgia Power’s ratepayers.”
“We’re making that assumption because we recognize the very low likelihood of that happening,” he said, adding that the brunt of the charges has been borne by company shareholders so far.
As reported previously by the AJC, many of Georgia Power’s customers already are paying Vogtle’s financing costs — to the tune of nearly $900 on average per ratepayer. And some independent monitors have raised fresh concerns that Georgia Power has been giving unreasonable projections about the project to justify its costs.
Liz Coyle, executive director of the consumer advocacy group Georgia Watch, called Thursday’s developments “very bad news” for Southern “but not a surprise.”
“Expert witnesses hired by the (Public Service) Commission to monitor the project already predicted these additional delays and cost overruns,” Coyle said. “We absolutely do not think Georgia Power’s captive ratepayers should have to bear the burden of these massive cost overruns.”
Tucker said that Southern has been “incredibly transparent and forthcoming with every update of the project that we have provided to all of our stakeholders.”
The Atlanta-based utility predicted early last year that Georgians finally would get electricity from the first of Vogtle’s two new reactors by November 2021, nearly 11 years after customers began paying for it and more than five years after initially planned. But within months, the company pushed back the projected completion date of the reactors four times.
Overall, Southern posted a fourth-quarter loss of $215 million, compared with a $387 million profit in the year-earlier quarter. For the full year, it booked a $2.39 billion profit, down from $3.12 billion in 2020.
Southern’s share price was largely unchanged in early afternoon trading Thursday on the New York Stock Exchange.
Tricia Pridemore, the chairman of the Public Service Commission, said the five-member body met Thursday morning to review Vogtle’s progress for the first half of 2021.
This is a developing story. Please check back for updates.
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