Georgia Power praises move by U.S. Congress to extend production tax credits for Vogtle nuclear expansion
Updated law would reduce risk for continuing construction of nation's only new nuclear units;
Extension would provide Georgia Power customers with approximately $1 billion in benefits;
Company recently announced $139 million in customer savings due largely to new federal tax laws
ATLANTA, Feb. 9, 2018 /PRNewswire/ -- Georgia Power today praised members of the U.S. Congress for voting to approve new legislation to extend the deadline for receiving advanced nuclear production tax credits. The approval follows extensive bipartisan efforts by Georgia Senator Johnny Isakson and other members of the Senate Finance Committee on the legislation which, if signed into law, will further reduce risk for continuing construction of Vogtle 3 & 4 while also providing approximately $1 billion in benefits for Georgia Power customers. The Vogtle nuclear expansion is leading the way for new nuclear construction in the United States and, once complete, will generate enough electricity to serve 500,000 homes and businesses.
"We are grateful to Senator Isakson for his leadership on this issue, and to the entire Georgia delegation for recognizing the importance of new nuclear generation and demonstrating renewed federal support for the Vogtle project," said Paul Bowers, chairman, president and CEO of Georgia Power. "At Georgia Power, we are focused on delivering value to our customers every day and we're committed to completing these new units, which will provide millions of Georgians with carbon-free energy and help keep electric rates low for 60 to 80 years into the future."
The Energy Policy Act of 2005 created a credit for production from advanced nuclear power facilities commonly referred to as Production Tax Credits (PTCs). Under this law, the Vogtle project will qualify for the advanced nuclear facility federal income tax credit of 1.8 cents for each kWh of electrical energy produced and sold once the units come online. While PTCs do not impact the in-service cost of the units, they provide benefits to customers through a reduction in revenue requirements beginning when the units go into service and for many years beyond.
Federal support and constructive legislation continue to be an important key to success for Vogtle 3 & 4. Georgia Power recently announced that, due to new federal tax laws, as well as the positive impact of the receipt of the full amount of parent guarantee payments from Toshiba, Georgia electric customers will pay $139 million less than expected for the Plant Vogtle expansion in 2018. Read more here. Additionally, the company holds a conditional commitment from the U.S. Department of Energy (DOE) for approximately $1.67 billion in additional loan guarantees for the Vogtle project. With a total of more than $5 billion in anticipated DOE loan guarantees, the company expects to be able to provide more than $500 million in present-value benefits to its 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. Today, after including anticipated customer benefits from federal PTCs, 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.
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 3 & 4 Move Forward in 2018
Georgia Power received unanimous approval to continue construction of the Vogtle 3 & 4 project from the Georgia Public Service Commission (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. 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 in January 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 receipt of PTCs and the expected benefits thereof, 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: Georgia Power Media Relations, (404) 506-7676 or (800) 282-1696