Plant Vogtle: Vote to halt or continue construction expected by Sept. 30, rating action says
By David Pendered
A vote on whether construction will continue at troubled Plant Vogtle is expected to come before its four co-owners by Sept. 30, according to a rating action issued by Moody’s Investors Service.
In addition, the recently disclosed $1.5 billion cost overrun for the project evidently prompted a partner in the deal to demand the group it’s part of cast a “No” vote on the question of continuing construction.
On Tuesday, the Georgia Public Service Commission instructed Georgia Power Co. to provide more details about the project risks at Plant Vogtle in its future reports to the PSC, to include:
- “Quantification of each risk, where reasonably estimated, should be presented. Variance(s) to plan, both cost and schedule, should also be quantified in dollars and days, respectively, and fully explained.”
“By passing these recommendations, we are requiring more transparency and more detailed information from the Company in future proceedings,” Commissioner Doug Everett (R-Albany) said in a statement.
The pending vote of the fate of Plant Vogtle’s construction was cited in a negative rating action issued Aug. 14 that affected $2.9 billion in bonds sold by MEAG to pay for its share of Vogtle’s construction. MEAG is one of four co-owners of the Vogtle project. The action states:
- “A required Joint Owners’ vote to decide on whether to proceed with the project is expected by the end of the third quarter after the 19th Vogtle Construction Monitoring (VCM) report is filed with the GPSC [Georgia Public Service Commission].
- “An affirmative vote by joint owners owning an aggregate of 90 percent of the ownership interests is required to proceed with the project, and the MEAG Power board will render the vote for the agency’s 22.7 percent interest.”
The latest cost overrun figure, $1.5 billion, was reported by Oglethorpe Power Corp., which owns 30 percent of Plant Vogtle. The $1.5 billion raises the total estimated cost of construction to some $27.5 billion, more than twice the original estimate.
In a quarterly report filed Aug. 10 with the Securities and Exchange Commission, Oglethorpe said Georgia Power had advised the co-owners of a cost overrun. The co-owners asked for a full analysis and were advised the price hike was estimated at $1.5 billion:
- “[P]rimarily due to changed assumptions related to the finalization of contract scopes and management responsibilities for Bechtel and over 60 subcontractors, craft labor incentives, as well as the related levels of project management, oversight and support, including field supervision and engineering support, required to complete the project.”
The demand to vote “No” to continuing constructions was issued by JAE to MEAG. JAE, the not-for-profit utility in Jacksonville, Fla. has a deal to purchase power produced at Plant Vogtle through MEAG. The letter observes:
- “A decision to continue cannot be justified on any rational basis…. Continuing to saddle ratepayers with more debt for a project that will be subsidized by the government or the project’s owners for years to come if it ever achieves COD [commercial operation date], or worse, a project that will have to be abandoned before completion after even greater sums are invested, is inconsistent with prudent utility practices.”