So, what is the current cost estimate for building two new Toshiba-Westinghouse AP1000 nuclear reactors at Southern Company’s Plant Vogtle near Waynesboro, Georgia along the Savannah River? It seems like it should be a simple question but it clearly is not. And the answer depends on when you ask, who you ask, what your question is exactly asking, how you ask the question and how much patience you have to wait for an actual answer. Those of us who attended the all-day public hearing in Atlanta before the Georgia Public Service Commission (PSC) in mid-December on the 13th semi-annual Vogtle Construction Monitoring (VCM) docket know what I’m talking about. For those of you who couldn’t, you can listen to it here (in 3 parts).
Here are the highlights (or “lowlights”) to save you time:
- The project is at least 39-months delayed; though more than five years in, only 26 percent of construction is complete.
- With more delays come more cost increases, in excess of $2 million per day for Georgia Power’s share of the project (they are 45.7 percent owners).
- Georgia Power’s estimated cost is now over $9.5 billion, more than $3 billion above the certified cost of $6.113 billion.
- All project benefits have been eliminated by the detriments (e.g. increased financing costs, replacement fuel costs, etc.).
- Approximately $21 billion was mentioned as the current total cost estimate for the entire Vogtle project, a staggering increase since the $14.1 billion estimate in 2009 (this figure does not include costs associated with even further delays).
But as I said earlier, when it comes to the Vogtle monitoring docket, getting the “answer” depends on who you ask and when and how. For example, Southern’s 13th VCM report and their witnesses who testified in early November stated that the current estimated project cost was just over $7.4 billion. It wasn’t until expert witnesses on behalf of the PSC’s Public Interest Advocacy Staff filed testimony later that month that we learned the cost is $8.409 billion, a 38 percent increase since certification, which includes the lost fuel savings and the $350 million cost increase for Georgia Power’s share of the project given the settlement between the utility owners and lead contractor Westinghouse that was announced in late October and recently finalized.
And then it took our attorney, former PSC Commissioner Robert “Bobby” Baker, to ask the important questions at the December hearing to tease out important details. Such as the fact that the 46 percent tax true up rate on the approximately $2.4 billion in financing costs associated with the 39-month delay should be included, bringing Georgia Power’s estimated cost to over $9.5 billion, more than $3 billion above the certified cost from 2009. And given Georgia Power is just one partner in the project, the total project cost estimate is now around $21 billion. You can watch the full cross examination here or a few short, but revealing excerpts here:
- confirmation of the 46 percent tax gross up not previously included
- confirmation of an additional $1.264 billion in financing costs due to the 39-month delay
- estimated cost of Georgia Power’s share of Vogtle now over $9.5 billion
- estimated total Vogtle price tag of approximately $21 billion
Conveniently for the Company and unfortunately for utility customers, no one gets to question Georgia Power’s experts again now that we have a better picture of what’s really going on. That’s because the Company once again did not submit rebuttal testimony — if it had, a hearing would have been held on January 19. The PSC is set to vote on approving the $148 million in expenditures on February 18, 2016.
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