Former Southern Company CEO: No apology needed for Plant Vogtle

First, I want to acknowledge Ms. Patty Durand’s desire for clean, affordable energy expressed in last week’s column; it is an objective we all share.

For more than a century, Southern Company has made remarkable achievements for the good of its customers, and that’s why I would like to give my perspective regarding the decision to build Plant Vogtle Units 3 and 4, as I was chairman and CEO of Southern Company at the time.

I think a little background is helpful in understanding our decision.

For starters, Georgia has one of the best regulatory frameworks in the entire nation. It demands routine filings that require Georgia Power to project needs for generating capacity. This includes projecting the type of capacity and associated infrastructure needed well in advance, in fact as much as 20 years in advance. The process also encourages vigorous engagement and debate about such projections from the public. It is only after such that the Georgia Public Service Commission decides how the company should proceed.

When I became CEO of Southern Company in 2004, after serving as CEO of Georgia Power for four years, I became convinced of several things. First, we needed more generating capacity, nuclear generation should be part of the mix for the good of the country, and there were few companies who had the operational expertise, the balance sheet, the regulatory framework, and the proven track record of performance with the Nuclear Regulatory Commission that Southern Company had and continues to have. So, our team, with PSC approval, moved forward to build Vogtle Units 3 & 4. Our approach has always been not to fall in love with a particular type of generation technology but to deploy all that make economic sense for our customers. The state PSC process I mentioned earlier facilitates that decision-making very well.

Traditionally, regulation requires capacity to be built, operational and declared “used and useful” before it goes into the rate base for cost recovery. Because of the size and scale of this project, the PSC and the company agreed to add greater rigor to the process through routine progress reporting and the appointment of an independent third-party by the Commission to monitor all aspects of construction on behalf of the Commission and for the benefit of ratepayers.

We began construction in March of 2009 with the project being contracted to a consortium of three companies: Shaw Group, Westinghouse and Toshiba. There were identical units being constructed in China by Toshiba, and we sought to leverage and learn from their experience. At this time, no nuclear plant had been built in the U.S. in several decades, so we knew it would be a complex process, but no one involved could have foreseen what was to come.

In March 2011, we faced one of the first huge challenges for the units with the accident at Fukushima Daiichi Nuclear Power Plant that put huge scrutiny on the project, resulting in a significant increase in oversight and regulatory requirements for the project.

The following year, in December 2012, Shaw Group was acquired by CB&I, kicking off the first change in our main construction contractor. Westinghouse would later, in 2015, acquire CB&I and take full responsibility for the engineering, procurement and construction contract.

In 2017, the unthinkable happened when Westinghouse filed for bankruptcy on March 29, 2017, which set in motion actions to ensure both the technology continued to be available to us and the project could move forward. By the end of the year, Southern Nuclear had entered into a contract with Bechtel under which Southern Nuclear would self-build the units with Bechtel as the new prime contractor – a partnership that would later take the project to completion.

The next big challenge came when the world was shut down in March 2020 by the COVID-19 pandemic, the impacts of which would be felt through 2022.

These are not excuses. They are facts. During this entire process and through each challenge, we never stopped being transparent with our customers, our regulators and our shareholders about our progress. Through the life of the project, there were 31 Vogtle Construction Monitor reports filed and 29 hearings before the PSC — all open to the public. It is also important to be clear: Vogtle did not, by itself, increase customer bills by 25 percent, and the suggestion that customers were simply handed the entire project cost is false. In fact, Georgia’s rates have been nearly 15 percent below the national average since 1990. Reducing a project and regulatory process of this size and complexity to a single number is misleading.

In reality, the decision to stop could have been made at any time. But leaders in our state and the company understood the value of this long-term investment. Others who tried similar projects did stop and wrote off hundreds of millions of dollars with nothing to show for it. Projects as complex as this are difficult at best. I do not suggest that we did not make mistakes. The company has acknowledged such, and its shareholders have absorbed nearly $3 billion in costs. While I am no longer in a position to speak for the company, I am certain they would readily own and apologize for such mistakes.

However, to suggest that it should apologize for completing 2,400 MW of new clean energy capacity that can power an estimated 1 million homes and will operate for at least the next 60 to 80 years is very shortsighted. Ms. Durand, like many, benefits from 20/20 hindsight. The alternative would have been to construct six new natural gas-fired plants or 24,000 acres of new solar capacity with its intermittent capabilities. At a time when every power company in the country is trying to build new capacity, having finished Vogtle 3 & 4 will serve Georgia very well.

While there are many other assertions made by Ms. Durand that deserve rebuttal, my space is limited. As for an apology for Plant Vogtle Units 3 & 4 — none is required.