From Master Resource
By Kennedy Maize — February 20, 2023
“The failure of the uncompleted V.C. Summer Units #2 and #3 ($10 billion), and the continuing woes at Vogtle, have marked the complete failure of Congress to create a ‘nuclear renaissance’ through the 2005 Energy Policy Act. The act provided for up to $8 billion each in ‘loan guarantees’ for new nuclear plants.”
“Nuclear ‘loan guarantee,’ it turns out, is a politically constructed term to cover the fact that the ‘guarantees’ are actually Treasury funds, and loan payments are made to the Treasury.”
The sun rises in the East and sets in the West. And Southern Company announces further delays in the startup of Georgia Power’s Vogtle Units 3 and 4, the only nuclear power plant under construction in the U.S.
In its annual financial report issued Feb. 16, Southern said it will push back the startup date for Unit 3 of the two-unit, Westinghouse AP-1000 reactor project to May or June of this year. Earlier, the company projected a startup of the unit in the first quarter of the year. Unit 4 startup is also likely to be delayed, according to the Atlanta-based company, until at least the 2023 4th Quarter, or perhaps (some might consider it likely) into 2024.
Southern said the latest delays would add $200 million to its share of the two-unit project, bringing its 47.5% share to $10.953 billion (or about $23 billion for the full project). Other owners include Oglethorpe Power Corp (30%), Municipal Electric Authority of Georgia (22.7%) and Dalton Utilities (1.6%). POWER magazine reported that “costs reported by MEAG in May last year suggested total spending for the expansion was close to $34 billion at the time.” Oglethorp, a large generation and transmission rural cooperative agency, has also said Southern has understated the Vogtle costs.
In 2009, Georgia Power announced the launch of the existing two-unit nuclear site with the two 1,117-MW Westinghouse reactors at an estimated cost of about $14 billion (with $6.5 billion from the U.S. Department of Energy), entering service in 2016 and 2017. The current tab has more than doubled well past $30 billion, with U.S. DOE in for $12 billion. More cost is accruing–and for no power to date.
According to Reuters, outgoing CEO Tom Fanning said on a call with investors, “After careful consideration and given our experience on Unit 3 and the degree of critical work ahead of us, we are further risk adjusting our Unit 4 schedule.” He said the needed work on Unit 3 includes pipe repairs, a valve fix, and improving flow through the reactor’s cooling pumps. He said tests at Unit 4 likely will reveal more problems. “We’re just trying to get anything we can see right now,” he said.
In its financial report, Vogtle reported a fourth-quarter 2022 loss of $87 million (8 cents per share), compared with a loss of $215 million (20 cents per share) in the 2021 fourth quarter. Southern Company reported full-year 2022 earnings of $3.5 billion, ($3.28 per share), compared with $2.4 billion ($2.26 per share) in 2021.
Summer: $10 Billion Failure
In 2017, a similar two-unit AP1000 new reactor project at SCANA Corp.’s V.C. Summer single-unit site in South Carolina, partnered with state-owned public power system Santee Cooper, went Vogtle-like and was finally cancelled at a sunk cost of $10 billion. Its aftermath, Nukegate, included criminal charges and convictions with SCANA sold at a bargain basement price to Virginia-based Dominion.
The failure of the SCANA project and the continuing woes at Vogtle have marked the complete failure of Congress to create a “nuclear renaissance” through the 2005 Energy Policy Act. The act provided for up to $8 billion each in “loan guarantees” for new nuclear plants. The idea was to make it easier for nuclear projects to finance new projects, as many previous lenders, burned by nuclear project failures, avoided lending money to nuclear projects or exorbitant interest rates. Nuclear “loan guarantee,” it turns out, is a politically constructed term to cover the fact that the “guarantees” are actually Treasury funds, and loan payments are made to the Treasury.
Conclusion
Chris Womack, CEO of Southern subsidiary Georgia Power, will become CEO of the parent company later this year. His Vogtle problems will come with him.