Toshiba fulfills $3.68 billion parent guarantee obligation for Vogtle nuclear expansion
All payments now received and will be used to reduce total cost of plant, benefit customers
ATLANTA, Dec. 14, 2017 /PRNewswire/ -- Georgia Power and the other Vogtle co-owners, Oglethorpe Power, MEAG Power and Dalton Utilities, have now received a total of $3.68 billion in parent guarantee payments from Toshiba, the full amount owed by the parent company of former primary Vogtle contractor Westinghouse. Toshiba originally agreed to make monthly payments through January 2021 but, under a new agreement reached earlier this month, delivered all remaining installments in a single payment of approximately $3.225 billion on December 14. Georgia Power's proportionate share of the payment is $1.47 billion.
Parent guarantees were put in place to protect Georgia electric customers as part of the original contract for the Vogtle nuclear expansion. The payments will reduce the total cost of the plant for Georgia Power by approximately $1.7 billion with every dollar received from Toshiba being used to benefit customers.
From the beginning of the Vogtle expansion, Georgia Power has worked to pursue all available benefits for customers and minimize the impact of the new units on electric bills. In addition to receiving 100 percent of parent guarantee funds available from Toshiba, the company recently announced a conditional commitment of approximately $1.67 billion in additional loan guarantees for the project from the U.S. Department of Energy (DOE). Today, after including anticipated customer benefits from federal production tax credits, interest savings from loan guarantees from the DOE and the fuel savings of nuclear energy, the projected peak rate impact to Georgia Power retail customers is approximately 10 percent, with 5 percent related to the project already in rates – well below original projections of approximately 12 percent.
Final approval and issuance of the additional loan guarantees by the DOE cannot be assured and are subject to the negotiation of definitive agreements, completion of due diligence by the DOE, receipt of any necessary regulatory approvals, and satisfaction of other conditions.
Vogtle Project Review Underway
On August 31, Georgia Power filed a recommendation with the Georgia Public Service Commission (PSC) to continue construction of the Vogtle nuclear expansion supported by all of the project's other co-owners. The recommendation was based on the results of a comprehensive schedule, cost-to-complete and cancellation assessment launched following the bankruptcy of Westinghouse in March. Receiving all remaining parent guarantee payments from Toshiba further strengthens the recommendation and eliminates one of the greatest risks for continuing construction of the only new nuclear units currently under construction in the United States.
The Georgia PSC is reviewing the recommendation to move forward and is expected to make a decision regarding the future of the Vogtle 3 and 4 project as part of the 17th Vogtle Construction Monitoring (VCM) proceeding on December 21. Read the 17th VCM Report here and recent comments from Georgia Power Chairman, President & CEO Paul Bowers to the Georgia PSC here.
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 2.5 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 consistently recognized by J.D. Power and Associates 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 communication 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 of the DOE loan guarantees, expected rate impacts and other future actions related to Plant Vogtle Units 3 and 4. Georgia Power 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; 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, 2016, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information; the impact of any failure to extend the in-service deadline for federal production tax credits; the impact of any failure to amend the DOE loan guarantee to allow for additional borrowings; state and federal rate regulations and the impact of pending and future rate cases and negotiations; the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; effects of inflation; the ability to control costs and avoid cost overruns during the development construction and operation of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed; 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 facilities into the Southern Company system upon completion of construction; advances in technology; legal proceedings and regulatory approvals and actions related to Plant Vogtle Units 3 and 4, including Georgia Public Service Commission approvals and Nuclear Regulatory Commission actions; interest rate fluctuations and financial market conditions and the results of financing efforts; changes in The Southern Company's or Georgia Power's credit ratings, including impacts on interest rates, access to capital markets, and collateral requirements; the impacts of any sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on foreign currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the benefits of DOE loan guarantees; and the effect of accounting pronouncements issued periodically by standard setting bodies. Georgia Power expressly disclaims any obligation to update any forward-looking information.
SOURCE Georgia Power
For further information: Media Contact: Georgia Power Media Relations, (404) 506-7676 or (800) 282-1696, www.georgiapower.com