Georgia Power Co. said this week that it had settled lawsuits with Westinghouse Electric and Chicago Bridge and Iron (CB&I) over delays at the Vogtle nuclear plant construction project with included protections that prevent future lawsuits dealing with engineering, material procurement and construction.
Georgia Power and other Vogtle co-owners, Oglethorpe Power Corporation, Municipal Electric Authority of Georgia and Dalton Utilities, have agreed to settle all claims, the company said in a statement.
The settlements are to take effect when Westinghouse closes on the acquisition of the nuclear build division of CB&I – a deal that was announced earlier this week, which puts Westinghouse in charge of construction of Votgle, as well as the V.C. Summer plant in Jenkinsville, S.C. , which is owned by Scana, Corporation and Santee Cooper. It also positions Westinghouse to take charge of AP1000 construction projects underway in China.
Georgia Power, meanwhile, which owns 45.7 percent of the Vogtle facility, will pay $350 million out of a settlement of more than $550 million. Oglethorpe Power Corp. will pay $230 million. Smaller shares will be paid by the other owners.
Westinghouse is to pay $229 million for CB&I's nuclear construction division. CB&I, which will maintain some presence in the construction projects, will write off more than $1 billion in losses, while Fluor Corp., in another deal announced this week, will take over construction management for Westinghouse.
The settlements are a substantial reduction from what Westinghouse and CB&I were seeking, which was $1.5 billion.
Tom Fanning, the chief executive officer at Southern Company, which owns Georgia Power, said the settlement amounted to 16 cents on the dollar. But he said the deal “removes a really big overhang from the company.”
Buzz Miller, executive vice president of nuclear development for Georgia Power, said the settlement is “extremely positive for the Vogtle project.” The contractors can now focus on the construction of the plant 100 percent, he said.
Georgia Power, said Power Grid International, said it expected its customers' bills would rise about 2.5 percent, covering $350 million of the settlement. Fanning said that total increases would be less than 7 percent, including the 4.5 percent rise already showing up on consumers' bills. State regulators would have to approve the company passing that expense down to consumers.
The dealing also involves the Summer construction project in South Carolina. Scana said its costs would increase by $286 million. Costs for minority owner Santee Cooper will rise by $112 million.
Finally, the wheeling and dealing could impact construction schedules. Georgia Power, however, said the current in-service dates of 2019 for Unit 3 and 2020 for Unit 4 remained intact. The plant expansion “remains the most economic choice for meeting the future energy needs of Georgia,” the company said.
Scana said the contract revisions revises the Guaranteed Substantial Completion Dates for Units 2 and 3 at Summer to August 2019 and 2020, respectively.
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