Oglethorpe Power, a 30 percent stakeholder in the Plant Vogtle two-reactor expansion project said Monday that its board of directors had approved of completion of the project under a conditional vote that included several cost control options designed to cap costs that continue to rise.
The company offered one scenario for a cap strategy, "in which there is a cap at the current project budget (inclusive of the [most recent] $2.3 billion budget increase) but allows for an additional $800 million to be added to the contingency, raising it to $1.6 billion," the company said.
Oglethorpe cited rising costs and noted "the projects partners have faced an ongoing series of cost increases." In the latest increase estimated by Southern Company, owner of Georgia Power, the largest shareholder in the project, the project costs are set to increase by the aforementioned $2.3 billion. "Collectively, the overruns have expanded Oglethorpe's share of the project budget from an initial estimate of $4.2 billion to approximately $7.25 billion."
While cost increases have become the norm, Oglethorpe said there were four years remaining on the construction schedule. As such, the company has "sought to protect electric cooperatives and their rural energy consumers and hold Southern Company accountable for its newly revised budget and let their owners be responsible for any additional amounts beyond this level."
"We are hopeful that the Southern Company will agree with a proposal to protect our rural energy consumers in Georgia who should not be responsible for excessive future increases in the costs of this project," said Mike Smith, president and CEO of Oglethorpe Power. "The Southern Company directly owns and controls Southern Nuclear Corporation (SNC), which has control of the site and project oversight of Vogtle 3 and 4. As SNC's owner, Southern Company should be willing to bear further risk of SNC's missed budgets, not our members."
"Capping our costs, and by extension the costs borne by our EMC members, is a reasonable request and a prudent business decision that would allow the project to move forward," Smith said in a statement.
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