Owners of the Plant Vogtle expansion project in Georgia said Tuesday that they had reached a new, non-bindng agreement with struggling Japanese conglomerate Toshiba, the parent company of the former primary Vogtle contractor Westinghouse Electric Company, that would allow them to receive all the remaining scheduled payments from Toshiba by Dec. 15, 2017.
The U.S. company Westinghouse, which is also struggling, declared bankruptcy in March of this year, prompting a dramatic restructuring of funding expectations and contractor management for both the Plant Vogtle expansion project and the V.C. Summer expansion project in South Carolina. Faced with rising costs and the absence of Westinghouse, owners of the South Carolina project, SCANA and Santee Cooper, however, elected to throw in the towel, closing down the two-reactor construction site with the project unfinished.
Owners of the project in Georgia, Georgia Power, a subsidiary of Southern Company, along with Oglethorpe Power Corp, MEAG Power and Dalton Utilities elected to stay the course on completion of the two Westinghouse-designed AP-1000 reactors.
In a statements issued Monday, Oglethorpe said the Japanese conglomerate agreed to pay “all the remaining scheduled payments … in the amount of $3.2 billion” before the end of the year.
Oglethorpe's proportionate share of the payment is $967.5 million. The company has already received initial payments from Toshiba totaling $136.5 million. Oglethorpe owns 30 percent of the Vogtle expansion project.
The deal only becomes binding with approval granted by Toshiba's board of directors and by the U.S. Department of Energy (DOE), the companies said.
Nevertheless, Oglethorpe President and Chief Executive Officer Mike Smith called the arrangement “a very positive development that will provide a significant payment upfront to help cover our portion of the costs to complete Vogtle Units 3 and 4.”
Georgia Power noted that it had already received $455 million from Toshiba and its share of the $3.2 billion forthcoming was $1.47 billion.
Funding developments related to the project also include an additional $1.67 billion in loan guarantees granted by the DOE. “Today, after including the anticipated customer benefits from federal production tax credits, interest savings from loan guarantees from the DOE and the fuel savings of nuclear energy, the projected peak rate impact to Georgia Power retail customers is approximately 10 percent, with 5 percent related to the project already in rates – well below original projections of approximately 12 percent,” said Georgia Power.
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