Federal loan guarantees delivering hundreds of millions in expected benefits for customers
ATLANTA, July 30, 2015 /PRNewswire/ -- Georgia Power has announced that it has received a total of $1.8 billion in loans to date from the Federal Financing Bank (FFB) for the construction of the Plant Vogtle nuclear expansion. This is roughly half of the $3.46 billion that the FFB will lend for the project. Loans from the FFB for Georgia Power's share of the Vogtle project are guaranteed under a 2014 agreement with the U.S. Department of Energy (DOE) – a partnership which is delivering hundreds of millions of dollars in expected benefits for customers.
"As we reach the halfway point in expected federal loans, the benefits of the Vogtle expansion we anticipate bringing to customers remain overwhelmingly positive," said Buzz Miller, executive vice president of nuclear development for Georgia Power. "Georgia Power, and the other co-owners that have worked to complete the loan guarantee process, recognized the value of pursuing federal support for the first new U.S. nuclear units in decades and are bringing real savings for the state's electric customers."
The latest draw of $600 million was secured with an interest rate set at 3.283 percent, fixed until the loan's final maturity on February 20, 2044. In part due to the current capital market environment, savings have exceeded estimates at the time the company secured the loan guarantee. The company now estimates that present-value benefits delivered to customers as a result of the DOE loan guarantee have risen to $330 million. With the latest draw, nearly $185 million of these benefits are now locked in for customers.
Benefits for customers under the fulfillment of the DOE loan guarantee are possible because of Georgia's constructive regulatory environment, as well as the company's continued strong performance and credit standing.
The construction of Plant Vogtle units 3 and 4 continues to be the most economic choice for meeting Georgia's future energy needs. Georgia Power estimates the total peak rate impact of the project on customer rates will be 6 to 8 percent, substantially less than originally estimated due to a variety of factors, including a proactive financing strategy by the company.
The expansion at Plant Vogtle is part of Georgia Power's long-term, strategic vision for providing safe, clean, reliable and affordable energy for Georgians well into the future. Once Units 3 and 4 join the existing two Vogtle units already in operation, Plant Vogtle is expected to generate more electricity than any U.S. nuclear facility, enough to power more than one million homes and businesses.
About Georgia Power
Georgia Power is the largest subsidiary of Southern Company (NYSE: SO), one of the nation's largest generators of electricity. Value, Reliability, Customer Service and Stewardship are the cornerstones of the company's promise to 2.4 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, 21st century coal and natural gas, as well as renewables such as solar, hydroelectric and wind. Consistently recognized as a leader in customer service, Georgia Power was recently ranked highest in overall business customer satisfaction among large utilities in the South by J.D. Power and Associates. For more information, visit www.GeorgiaPower.com and connect with the company on Facebook (Facebook.com/GeorgiaPower) and Twitter (Twitter.com/GeorgiaPower).
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 expected benefits to customers and expected customer rate impacts. Georgia Power Company cautions that there are certain factors that could 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 Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Georgia Power Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes and also changes in tax and other laws and regulations to which Georgia Power Company is subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; the ability to control costs and avoid cost overruns during the development and construction of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed, including changes in labor costs and productivity, adverse weather conditions, shortages and inconsistent quality of equipment, materials, and labor, contractor or supplier delay, non-performance under construction or other agreements, operational readiness, including specialized operator training and required site safety programs, unforeseen engineering or design problems, start-up activities (including major equipment failure and system integration), and/or operational performance (including additional costs to satisfy any operational parameters ultimately adopted by the Georgia Public Service Commission ("PSC")); the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate Plant Vogtle Units 3 and 4 into the Southern Company system upon completion of construction; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; legal proceedings and regulatory approvals and actions related to the Plant Vogtle expansion, including Georgia PSC approvals and Nuclear Regulatory Commission actions and related legal proceedings involving the commercial parties; the inherent risks involved in operating and constructing nuclear generating facilities, including environmental, health, regulatory, natural disaster, terrorism, and financial risks; the ability of counterparties of Georgia Power Company to make payments as and when due and to perform as required; the direct or indirect effect on Georgia Power Company's business resulting from cyber intrusion or terrorist incidents and the threat of terrorist incidents; and catastrophic events such as fires, earthquakes, explosions, floods, hurricanes and other storms, droughts, pandemic health events such as influenzas, or other similar occurrences. Georgia Power Company expressly disclaims any obligation to update any forward-looking information.
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SOURCE Georgia Power
For further information: Georgia Power Media Relations, (404) 506-7676 or (800) 282-1696, www.georgiapower.com