Southern Co.: schedule slips on building new Ga. nuclear plant (Vogtle)

[FBaggins]

$400M in disputed costs

The timeline for building a first-of-its-kind nuclear plant in Georgia has slipped seven months, while the Southern Co. faces a dispute over who should pay for $400 million in unanticipated costs, utility executives said Wednesday.

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The companies designing and building the power plant — The Shaw Group Inc. and Westinghouse Electric Co. — want Georgia Power to pay an additional $400 million to cover increased costs blamed on design changes and delays, according to the utility's financial filings. So far, spending on the project remains $28 million under budget, although those estimates from Georgia Power do not account for the potential cost of the disputes with its business partners.

The utility has not accepted responsibility for the extra costs and says the companies designing and building the plant could be responsible for paying all or some of the extra bills, not its electric customers. Under questioning by a commission lawyer, McKinney acknowledged the project may cost more than expected unless the current situation changes. "I can't say that it's highly likely that the cost would be able to maintain, you know, the current projections without some kind of potential adjustment if those cost pressures continue to mount," he said.

http://www.therepublic.com/view/story/2fb43253645f49fdb565e395ff65476a/GA--Nuclear-Costs/

[FBaggins]

1. An interesting variation on the same story.

Vogtle project cost drops, Ga. Power says

Georgia Power Co. executives told the Public Service Commission Wednesday that the cost of financing two new reactors at Plant Vogtle is dropping another $1 billion, but the first electricity from them will come eight months later than planned. Their comments came in testimony during the commission’s semi-annual cost review. While construction costs have only fluctuated about $28 million from the original estimate, the financing expense is now nearly $2 billion lower because of several factors.

Kyle Leach, the director of resource planning for the giant utility, credits lower interest rates in bond sales last week and in March with the latest savings to power customers. Earlier, the company announced the initial savings figure attributed to federal loan guarantees, inflation-protection agreements and a controversial law that has customers paying some of the finance charges up front.

Georgia Power has been selling its bonds to investors 3-4 percentage points lower than what it expected five years ago when the commission originally approved the project. By the end of the year, most of the financing will be in place, but Leach acknowledged that a spike in interest rates next year could erase some of those savings.

At the same time, the cost of building the reactors could go up. That depends on negotiations between Georgia Power and its construction company over who’s to blame for $400 million in changes to the blueprints, including installation of steel-reinforcement rebar in the concrete different from what was specified. “Those negotiations have been more protracted than we anticipated,” Leach said.



http://chronicle.augusta.com/latest-news/2012-05-09/vogtle-project-cost-drops-ga-power-says?v=1336586301