Vogtle Nuclear Plant in Georgia Faces More Construction Delays -- 2nd Update
June 08 2021 - 4:17PM
Dow Jones News
By Russell Gold
The only nuclear-power plant under construction in the U.S. is
facing delays and additional costs. Again.
Earlier this week, an engineering expert working for the Georgia
Public Service Commission testified that the startup of the Alvin
W. Vogtle Electric Generating Plant would likely be delayed until
the summer of 2022 and cost $2 billion more than expected.
Southern Co., the Atlanta-based utility building the
nuclear-power plant, said it expects the first reactor to be
completed during the first quarter of 2022. A spokesman for the
company said its judgment was based on current information and that
"risks remain on the project and it is possible that the cost
estimate could increase in the future."
Any delays after November 2021 would result in a reduction in
the regulated profit that Southern subsidiary Georgia Power
receives for building the nuclear reactor.
Vogtle has been beset by numerous delays and cost overruns. It
was originally scheduled to open in 2016, and the total cost of the
two planned Vogtle reactors tops $27 billion -- more than double
the initial estimates approved by state regulators in 2008.
The problems finishing Vogtle have damped enthusiasm for what
was hailed a decade ago as a possible nuclear renaissance in the
U.S. Today, the facility located near Augusta, Ga., highlights the
financial and industrial difficulty of building a nuclear-power
plant in a country that hasn't completed a new one in three
decades.
Georgia almost gave up on the project amid cost overruns and
delays. In 2017, state officials voted to continue building the
reactors, but limited Southern's future returns on the project if
further postponements occurred. At the time, Southern promised that
a new contractor would resolve construction delays. The utility
later took a charge to its earnings and promised to have the first
of two new reactors completed and generating electricity by
November 2021.
"They will be late and they will pay a penalty," said Tim
Echols, vice chairman of the Georgia Public Service Commission.
"They were willing to negotiate then because they thought they
would be on time. I think they are regretting it today."
Over the past couple of years, work has progressed on the
reactors. Southern is running what is known as a hot test to make
sure everything is working properly at the plant before nuclear
fuel is added.
In a filing Monday with the Georgia Public Service Commission,
project monitor Donald Grace said he expects the plant's startup to
be pushed back "by roughly seven to nine months, or more." Mr.
Grace, the vice president of engineering at the Vogtle Monitoring
Group, which was retained by the commission's public-interest
staff, also said the plant's costs would increase by an estimated
$2 billion.
He blamed Southern's decision to accelerate testing of the unit
before completion of most of the construction work. "This has then
led to inefficient and costly execution of construction,
piece-by-piece testing and retesting of partial systems and
complete systems," he testified. He also said some electrical work
will require remediation.
In recent weeks, Southern Chairman and Chief Executive Thomas A.
Fanning pushed back the plant's scheduled start of generating
electricity from November 2021 until early 2022. Last month, he
said at the company's annual shareholder meeting that testing of
the equipment to ensure the plant was safe "may take a few weeks
longer than our original plan."
Cost overruns doomed the only other new U.S. nuclear-power plant
begun this century. In 2017, Scana Corp. scrapped plans to finish a
half-built nuclear-power plant in South Carolina. When first
proposed in 2008, the V.C. Summer Nuclear Station was expected to
cost $11.5 billion. A minority owner of the plant, state-owned
electric utility Santee Cooper, said cost estimates had ballooned
to $25.7 billion.
The fallout from the decision to stop work on the nuclear
station -- which saddled South Carolina electric customers with
large bills for a plant that will never generate power -- turned
into a political and financial controversy in the Palmetto State
involving who should pay and who was responsible for decisions to
move ahead with the project despite signs of trouble. Scana later
agreed to a $137.5 million settlement to resolve civil-fraud
charges related to the failed project, after the Securities and
Exchange Commission accused the company and a subsidiary of
defrauding investors by making false statements about the
half-built plant. Scana lost support from the state's political
leaders, and in 2019 Dominion Energy Inc. acquired the company.
Despite generating carbon-free electricity, the nuclear-power
industry has struggled in recent years. Competition from renewables
and low-cost natural-gas-fired plants has lowered wholesale power
prices and hurt the economics of existing plants. Several power
plants have shut, most recently Entergy Corp.'s Indian Point Energy
Center, north of New York City, which closed permanently in
April.
The 2020 World Nuclear Industry Status Report, a widely cited
independent industry analysis, said 408 reactors were operating
last year world-wide, down from a peak of 438 in 2002. A small
number of new reactors have started in recent years, in China,
Russia, South Korea and the United Arab Emirates, according to the
report.
Over the past decade, the cost of generating electricity from
new nuclear-power plants has increased about 33% and the cost of
new solar generation has fallen 90%, said Mycle Schneider,
publisher of the report. "The scissors are opening wider and wider
and I haven't seen any sign anywhere that this is going to stop,"
he said.
Write to Russell Gold at russell.gold@wsj.com
(END) Dow Jones Newswires
June 08, 2021 16:06 ET (20:06 GMT)
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