Georgia Power Drags Reluctant Project Owners into Continuing Flawed Vogtle Expansion
Decision Exposes Georgians to Even Greater Financial Risk
ATLANTA, GA—Late yesterday, Oglethorpe Power Corporation voted to move forward with the ill-fated Vogtle nuclear expansion project despite significant concerns about recent and future multi-billion dollar cost increases.
As the final project owner to weigh in on whether to continue the project, Oglethorpe’s decision came after days of deliberation and unsuccessful demands for Georgia Power to cap ballooning construction costs to protect customers from bearing additional financial risk. The agreement also follows on the heels of a letter from Georgia lawmakers stating that it is unfair for the rising costs of the project to be passed along to smaller public power companies that do not have shareholders to shield their customers from further financial blowback.
In response to the vote to continue the project, the following statement is from SELC Senior Attorney, Kurt Ebersbach:
“Georgia Power’s refusal to accept any cap—even a generous one—on Plant Vogtle should alarm nearly every Georgian who pays an electric bill. Georgia Power clearly has no faith in its ability to finish this plant without more billion-dollar surprises. Worse, Georgia Power still has little incentive to contain those costs, which leaves Georgians exposed to unchecked financial risk and uncertainty about how much they’ll ultimately be forced to pay.
“While the agreement shifts some additional risk and responsibility to Georgia Power if costs continue to skyrocket, it’s unclear whether utility shareholders or Georgia Power customers will foot the bill. What’s more, the new agreement strips away the last remaining safety net—the option for the other project owners to pull the plug if project costs continue to soar.”
In order to continue construction of the Vogtle nuclear expansion, the project needed at least 90 percent of the partners (Georgia Power, Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, City of Dalton) to agree to go forward after it was recently revealed that the total price tag had gone up an additional $2.3 billion, and after Georgia Power’s agreement to absorb $700 million of those costs rather than passing them along to customers.
On Monday afternoon, MEAG voted to continue with no apparent conditions attached. On Monday evening, Oglethorpe voted to continue with one major condition: there needed to be a cost cap. Oglethorpe’s suggested condition would have allowed for some additional spending, but would have ultimately limited the risk to its customers.
Georgia Power rejected Oglethorpe’s overture, resulting in two days of negotiations. As a 30 percent owner, Oglethorpe’s refusal to move ahead with the project without a cost cap would likely have meant the end of the Vogtle expansion.
With Oglethorpe’s agreement last night, all project owners have ultimately decided to move forward with no cap on project costs.
Following the vote, Southern Company submitted an updated SEC filing, stating that all project owners are obligated to pay their share of the latest total cost estimate (including the recent $2.3 billion increase), plus another $800 million in construction costs. This means the owners have all agreed to move forward knowing the current estimate and assuming the project price is likely to increase by at least another $800 million.
About Southern Environmental Law Center: For more than 30 years, the Southern Environmental Law Center has used the power of the law to champion the environment of the Southeast. With over 80 attorneys and nine offices across the region, SELC is widely recognized as the Southeast’s foremost environmental organization and regional leader. SELC works on a full range of environmental issues to protect our natural resources and the health and well-being of all the people in our region. www.SouthernEnvironment.org