Georgia Power on Monday announced a significant and potentially nerve-calming financial milestone, saying that the company had received the first tranche of a settlement from ailing Japanese conglomerate Toshiba, owner of Westinghouse Electric Company, which declared bankruptcy on March 29, 2017.
The Westinghouse bankruptcy set off a chain of events that included a scramble to secure the financial future of the Vogtle nuclear power plant expansion project, of which Westinghouse was the designer and lead contractor on the project.
Georgia Power secured a commitment from Toshiba that amounted to $3.68 billions that would settle claims on the contract.
A similar drama unfolded in South Carolina, where the fate of SCANA Corporation and Santee Cooper's V.C. Summer nuclear power plant expansion project – another 2-unit Westinghouse lead AP-1000 reactor project – was in question. Those companies, however, agreed to cancel their project after about $9 billion had been spent, due to sharply escalating costs and evolving market economics. Last Wednesday, the two South Carolina companies voted to sell their $2.17 billion with Toshiba to Citibank. This puts cash in the company coffers in South Carolina immediately and transfers the risk of a Toshiba default to Citibank.
Georgia Power, which owns 45.7 percent of the Vogtle expansion project, along with Oglethorpe Power, MEAG Power and Dalton Utilities, which own minority shares, announced it had received $300 million from Toshiba, the first tranche in a long-term arrangement. Technically, Georgia Power's share of the $300, based on its 45.7 percent ownership of the project, is $138 million, the company said.
The company said, “this payment is positive indication of Toshiba's commitment to meeting its financial obligation under the parent guarantee, which was put in place to protect Georgia electric customers as part of the original contract for the project.”
While this helps secure the future of the project, Georgia Power noted that it had submitted is recommendation to the Georgia Public Services Commission on the latest comprehensive schedule and cost analysis for the project on 31 August. The company, which recommended the project continue, is waiting for approval from the regulator for the cost and time line schedule.
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