The U.S. nuclear power industry is beset with another wait-and-see week, as thousands of construction workers on site, hundreds of thousands of ratepayers and constituents across the state of Georgia anticipate the decision this week on whether or not the Plant Vogtle expansion project will continue.
It was learned Friday that Oglethorpe Powder, a 30 percent owner of the two-reactor construction project on the Savannah River in Georgia, has requested a $1.6 billion extension of its $3 billion Department of Energy (DOE) loan guarantee, a reminder that federal taxpayers – almost everyone in the country – already has a stake in the project should it fail to come to fruition.
If it is completed and power is Units 3 and 4 at Vogtle are commissioned, Oglethorpe and other partners in the project – especially Southern Co. subsidiary Georgia Power, owner of 45.7 percent of the project – will payback the loans. If they cannot repay, taxpayers across the country will pick up the bill for the loans outstanding. So far, the DOE has guaranteed $8.3 billion in loans for the project, including $3 billion for Oglethorpe, which has drawn $1.7 billion on that account, according to the Atlanta Journal Constitution.
In mid-August, the Georgia Public Service Commission (GPSC) requested Georgia Power respond to a 14-question inquiry as to the state of the project that is considered 65 percent complete as of May – a figure that includes engineering and procurement factors. Based on construction alone, the two units are about 44 percent done, Southern Company said in May.
The GPSC is considered a strong advocate for the program. Commissioner Tim Echols recently applauded the project in a Wall Street Journal op-ed story, drawing attention to the use of nuclear power in production of medical isotopes, its military uses and the need to keep pace with Russia and China on the world stage in a critical industry.
GPSC Chair Stan Wise was more pithy. Abandoning the project now would be “truly, throwing money down the rat's hole,” he said.
The bottom line, media reports indicate, is Georgia Power's $50 million per month cost of the project and the revised costs and construction schedule that is expected. The project is reportedly $11 billion over budget and is not due for completion until 2023 at this point. The original completion date was April 2017. There are many other factors that go into the decision, however, for the project that is now estimated to reach $20 billion to $25 billion in total cost.
The social and environmental factors include the looming threat of global warming and the changes in the energy market. The declining price of natural gas prompted by increased supply brought about by the new technique of hydro-fracking has skewed the understanding of the market that was available in 2009, when the first shovels went into the ground for the Vogtle expansion. In addition, even though the population of Georgia has been growing, demand has become slack thanks in part to improved efficiencies in electronics and in part to the last recession, which kept the size of the economy in check.
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