Georgia Power said on Tuesday it had reached an agreement with Toshiba to accelerate a $ 3.2 billion payment to help save two nuclear reactors under construction in Georgia.
Under the agreement, Toshiba will make payments by December 15 on behalf of its bankruptcy nuclear construction subsidiary Westinghouse.
The agreement was released four days after three staff members of the Georgia Public Service Commission said the project at the Vogtle power plant "no longer economical" given the huge cost overruns, construction delays and the burden that would be imposed on taxpayers while the company benefits. The PSC commissioners will decide in February if they will let the project move forward.
The Trump administration has promised $ 3.7 billion in new loan guarantees for the pair of reactors, even though the administration is urging Congress to eliminate the Department of Energy loan guarantee programs. The administration and Congress are working to advocate for new loan guarantees for nuclear reactors and for a large chemical plant in Lake Charles, La.
The Vogtle project, whose cost estimates soared from $ 14 billion in 2008 to approximately $ 23 billion, was once seen as part of a wave of new nuclear power plants. Today the two reactors are the only ones under construction in the United States, and their completion date has been delayed to 2021.
Construction stopped at two reactors in South Carolina earlier this year.
Excess costs overwhelmed Westinghouse, a landmark name in the nuclear power business that promoted its AP1000 plant design as an advance in costs and safety.
Georgia Power, a subsidiary of Southern Company that owns 46 percent of the Vogtle reactor project, said on Tuesday that its agreement with Toshiba is subject to the board of the Japanese electronics giant, but Toshiba recently raised $ 5.4 billion. dollars in a sale of new shares for its US nuclear unit.
However, the public interest defense staff of PSC of Georgia wrote that the economic costs of nuclear reactors would exceed the benefits by $ 1.6 billion.
Staff advised the commission to block rate increases for costs due to mismanagement, bankruptcy delays and the construction of Westinghouse. "It is not reasonable for taxpayers to have to bear higher costs as a result of the Units not being built efficiently," says the staff report.
Georgia, Mississippi and South Carolina are among the few states where utilities may request fees to pay for the power plant before the plant is online and produce energy, but services must obtain commission approval of public service of the states.
The share of Georgia Power's costs has doubled to $ 12.2 billion, with $ 8.8 billion for construction and $ 3.4 billion for financing. Commission staff estimated that taxpayers would end up paying $ 4.5 billion of that.
Originally the company planned to receive production tax credits from the federal government, but now the 68-month delay in the schedule means it will not end in time to qualify for the credits. Project partners may also lose additional depreciation benefits. Georgia Power said in a statement Tuesday that it was still planning credits, whose implementation date can be modified by Congress.
Even if the company qualifies for the credits, the staff of the public service commission noted that the cut in the corporate tax rate that Congress is evaluating would reduce the value of those $ 1.1 billion tax credits to $ 900 million.