A critical vote in September by the board members at Oglethorpe Power, owners of 30 percent of the Plant Vogtle expansion project in Georgia, could decide the fate of the project, where Georgia Power recently announced a significant cost escalation compared with previous estimates.
Georgia Power said on August 9 that costs had risen with their share of the project jumping from $7.3 billion to $8.4 billion The entire project costs had jumped by $1.5 billion. For Oglethorpe power, owning close to a third of the project, costs had risen by $450 million, World Nuclear Association reported.
The remaining shares of the project are held by MEAG Power, which owns 22.7 percent and Dalton Utilities, which owns 1.6 percent.
The immediate question is whether or not a retreat by Oglethorpe Power would create a domino effect that caused the other owners to back away from the project, as well. The alternative would be for the remaining owners or a new funding partner purchase all or some of Oglethorpe's holdings.
Oglethorpe Power had set aside $7 billion for its share of the Vogtle project, but the latest cost jump would have that funding dwindle down to a negligible amount, WNA said. Part of the Oglethorpe board's consideration, meanwhile, would certainly be focused on whether or not costs would go up further before the Vogle Units 3 and 4 are completed. The estimated start up dates for each reactor is, respectively, in November 2021 and 2022.
Oglethorpe President and Chief Executive Officer Mike Smith told investors in a recent conference call that the most logical decision was an all or nothing approach. Given the learning curve advantageous in building two reactors – the first project informing the second with lessons learned – it would not be smart to just complete Unit 3 to save funding. “If you're going to complete Unit 3 it makes all the sense in the world to complete Unit 4,” he told investors.
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If it's an all or nothing approach then it is time to pull the plug then to keep pouring money down the hole.
Before America fails to put more BASELOAD ABLE plants online, the country need only look at South Africa's looming loss of generating capacity. Almost every day the national power company warns of rolling blackouts in fear of total grid collapse.
America's economy runs on electricity that is there 24/7/365, non-polluting and cheap once the up front costs are borne. 60 years of power at least will come from these plants. If America does not modernize its grid and supply, the day will come when the lights will not come on when you flip you light switch.
THEN you will wish you paid the price...
Four AP1000's have already been built in China. Two are already in power ascension testing prior to full commercial operation. But the USA can't even build 2? Obviously we can, if we have the will.
The problem here is a gross mis-allocation of risk. Westinghouse offered to take the risk by offering a fixed-price plant, but couldn't deliver and bankrupted itself trying. Now the utilities have taken the risk, offset somewhat by loan guarantees and some federal incentives. But the utilities are taking on something that should be a national priority and will benefit the entire USA if it only works as well here as it is already working in China. Such small entities should not be stuck with the risk of something with nation-wide benefits.
The US taxpayer should take on the job of completing these plants, and then the two at V C Summer. We should see just how well the experience pays off in lower costs and faster construction. Only then should go/no-go decisions be made about the future of the AP1000 design in the USA. Pulling the plug now would most certainly throw all the money spent so far into a black hole.
All goes back to Westinghouse declaring bankruptcy less than a year after negotiating in bad faith a fixed price contract with both nuclear customers in the US and those customers exercising the fixed price options. So the fall out continues and Westinghouse emerges from bankruptcy a stronger entity according to their current CEO. If Oglethorpe Power Board withdraws and the project gets cancelled a total of more than 10,000 people will have lost their jobs.
One can't help but wonder if the cost over runs were an issue and Westinghouse was blamed and run off for these over runs. Now Bechtel is being blamed for cost over runs and now laying off tons of people. Seems to me Southern Company and Georgia Power couldn't control the costs from either and blaming the engineering companies?? You are not seeing anything in the news about Southern Company or Georgia Power taking the blame for any of this......just sayin'