Vogtle 3 & 4 to have lower rate impact for Georgia Power customers
Savings and benefits driving down expected cost of new nuclear units;
New site management delivers improved productivity and construction progress in 2017;
Direct construction work tracking ahead of plan to achieve target in-service dates

ATLANTA, Feb. 28, 2018 /PRNewswire/ -- Georgia Power today filed its 18th Vogtle Construction Monitoring (VCM) Report with the Georgia Public Service Commission (PSC). The 18th VCM Report, available here, includes a revised, lower projected rate impact for customers and outlines continued progress and productivity improvement at the construction site near Waynesboro, Georgia. The report also reaffirms the target in-service dates of November 2021 (Unit 3) and November 2022 (Unit 4) and that completing the new units remains the best cost option to meeting the future energy needs of Georgia.

Georgia Power logo. (PRNewsFoto/Georgia Power)

The company files a VCM Report every six months to provide an update on construction progress and other information related to the construction of the nation's only new nuclear units. Today's filing chronicles the last six months of 2017 and marks the first VCM update since Georgia Power received unanimous approval from the Georgia PSC in December 2017 to move forward with construction of Vogtle 3 & 4.

Savings & Benefits for 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. The projected peak rate impact for customers included in today's report has been reduced to 9.8 percent with more than half of this impact already in place on bills. This projected rate impact is well below original projections of approximately 12 percent thanks to new federal tax laws, anticipated customer benefits from federal production tax credits (PTCs), interest savings from loan guarantees from the U.S. Department of Energy (DOE), and the fuel savings of nuclear energy.

Over the past several months, the company has announced multiple positive developments delivering savings and benefits for customers and reducing the expected cost of the plant, including:  

  • Full payment from Toshiba of $3.68 billion in parent guarantee payments to Georgia Power and the other Vogtle co-owners, Oglethorpe Power, MEAG Power and Dalton Utilities. Toshiba made the payments as the parent company of former primary Vogtle contractor Westinghouse. 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 with every dollar received from Toshiba being used to benefit customers.
  • Customers will pay $139 million less than previously expected due to the impact of new federal tax laws and the receipt of the full amount of parent guarantee payments from Toshiba. The savings will be delivered beginning in April 2018 through a reduction in the Nuclear Construction Cost Recovery tariff on customers' bills.
  • $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 were approved by the Georgia PSC as part of its order to continue construction with Vogtle 3 & 4 and will be distributed across three separate Georgia Power bills in 2018.
  • Approximately $1 billion in benefits for customers due to the recent extension of federal PTCs. 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.
  • $500 million in expected customer savings due to $5 billion in anticipated loan guarantees from the U.S. DOE, including $1.67 billion under a new conditional commitment. 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.

Progress & Productivity
Vogtle 3 & 4 remains the most important energy infrastructure project currently underway in Georgia with more than 6,000 workers onsite and approximately 800 full time careers once the new units begin operating. The 18th VCM Report illustrates that, following the Westinghouse bankruptcy in March 2017, all Vogtle co-owners worked together to mitigate impacts and 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.

According to the 18th VCM Report, since Southern Nuclear assumed overall project management in 2017, productivity at the construction site has improved and direct construction work is currently tracking ahead of the plan to achieve the target in-service dates.

Progress and milestones noted in the second half of 2017 include:

  • The successful negotiation and transition to a new services agreement with Westinghouse to provide design, engineering and support services for the project.
  • Construction progress on both units, including the installation of key modules and components such as both steam generators and the Pressurizer for Unit 3, and structural modules CA02 and CA03 for Unit 4. Additionally, thousands of tons of rebar and tens of thousands of cubic yards of concrete placed throughout the site.
  • Major equipment deliveries to the site including squib valves for both units, the Passive Residual Heat Removal Heat Exchanger for Unit 4 and Unit 4 Reactor Vessel Internals. A vast majority of modules and equipment needed to complete the project is now onsite
  • Increased licensing efficiencies reached with the Nuclear Regulatory Commission (NRC) related to the number of Inspection, Test, Analysis and Acceptance Criteria (ITAAC) from approximately 875 per unit to 450 per unit. This effort did not reduce the scope of the ITAAC program, but streamlined the administrative requirements to both the company and the NRC.
  • Continued transition to testing and startup activities for the new units, including the onboarding of 14 licensed operators from the V.C. Summer project in South Carolina, saving nearly two years of training time and costs.

To follow the progress, visit the Georgia Power YouTube Channel and view new photos added each month in the Plant Vogtle 3 & 4 Online Photo Gallery.

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 the expected in-service dates for Plant Vogtle Units 3 and 4, expected customer rate impacts, expected cost savings and customer benefits 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, 2017, 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 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; the uncertainty surrounding the recently enacted federal tax reform legislation, including implementing regulations and Internal Revenue Service interpretations, actions that may be taken in response by regulatory authorities, and its impact, if any, on the credit ratings of Georgia Power; current and future litigation or 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 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 NRC 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