Georgia Power customers to pay $139 million less for Vogtle expansion in 2018
Additional $188 million in bill credits and $43.6 million refund also scheduled for this year
ATLANTA, Jan. 30, 2018 /PRNewswire/ -- Georgia Power today filed an update for the Nuclear Construction Cost Recovery (NCCR) tariff with the Georgia Public Service Commission (PSC) indicating customers will pay $139 million less for the Plant Vogtle expansion in 2018. Beginning in April, the typical residential customer using 1,000 kilowatt-hours per month will pay $2.70 less than expected per month in financing costs for the Vogtle project. The savings are due to recent changes in federal tax law, as well as the positive impact of the receipt of the full amount of parent guarantee payments from Toshiba. The company continues to evaluate broader impacts of the changes in federal tax law, which will result in additional customer savings and plans to file a report with the Georgia PSC by Feb. 20.
In addition to the reduction in the NCCR tariff, the Georgia PSC recently approved $188 million, a total of $75 each for individual customers, in bill credits as a direct result of the Toshiba parent guarantee payments. The credits will be distributed across three separate Georgia Power bills in 2018.
The company is also working with the Georgia PSC to determine timing and details for a 2018 refund of $43.6 million the company earned above its allowed earnings range in 2016. As a regulated utility, Georgia Power is allowed to earn a return on equity (ROE) of 10 percent to 12 percent per year. The company works to efficiently manage its business while providing customers with reliable and affordable service and refunds two-thirds of earnings over 12 percent back to customers across the state.
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. As part of this strategy, the company recovers financing costs for the project in accordance with state law through the NCCR tariff approved by the Georgia PSC. This structure saves customers hundreds of millions of dollars by reducing financing and borrowing costs, while also phasing the plant into rates over time helping to avoid "rate shock" once the new units come online. Today, after including these savings, 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 well below original projections of approximately 12 percent with 5 percent related to the project already in rates.
Parent guarantees backed by Toshiba as the parent company of Westinghouse, the original contractor for the Vogtle project, were put in place to protect Georgia electric customers at the beginning of construction. Toshiba fulfilled all remaining payments, for a total of $3.68 billion for all of the Vogtle co-owners in December 2017, eliminating a major risk for continuing construction of the nation's only new nuclear units.
Vogtle 3 & 4 Move Forward in 2018
Georgia Power received unanimous approval to continue construction of the Vogtle 3 & 4 project from the Georgia PSC in December 2017. The decision followed months of review and evaluation of a unified recommendation conducted by the Vogtle co-owners prompted by the bankruptcy of former primary Vogtle contractor Westinghouse. The decision continues to protect customers with new penalties for delays and cost increases in addition to penalties included in the previous stipulated agreement approved earlier in 2017 by the Georgia PSC. Under this amended structure, shareholders will see a significant impact of approximately $750 million through November 2022. Additionally, as a result, the amount paid by customers will be reduced by more than $1.7 billion during the construction period. Read more about the decision to complete Vogtle 3 & 4 here.
Construction has continued uninterrupted at the Vogtle site following Westinghouse's bankruptcy in March 2017 with all Vogtle co-owners working together to maintain the project's momentum. Southern Nuclear, the nuclear operating subsidiary which operates the existing units in Georgia, is now the project manager at the site with global construction firm Bechtel managing daily construction efforts. Progress is steady and evident, illustrated by multiple recent achievements such as the placement of the 225,000-pound Unit 3 pressurizer this month and 1,300 cubic yards of concrete placed inside the Unit 4 containment vessel in December.
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 rate impacts and 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: Georgia Power Media Relations, (404) 506-7676 or (800) 282-1696, www.georgiapower.com