Canceling Georgia nuclear plant could cost owners billions
ATLANTA (AP) — The federal government is warning the owners of a troubled nuclear power plant in Georgia that any move to cancel a planned expansion would lead to demands for quick repayment of nearly $6 billion in federal loans.
In a letter to the plant’s three owners, the Department of Energy said late Friday that if the construction project is canceled, the government is “prepared to move swiftly to fully enforce its rights under terms of the loan guarantee agreements, including the repayment provisions.”
The letter calls the two additional reactors being built at Plant Vogtle, approximately 30 miles (50 kilometers) south of Augusta, the nation’s first large-scale nuclear project in more than 30 years and “a linchpin in the all-of-the-above energy strategy required to sustain our nation’s economic strength and energy independence.”
The government has disbursed $5.6 billion of an $8.3 billion loan guarantee approved during the Obama administration. The Trump administration announced conditional commitments of up to $3.7 billion in additional loan guarantees last year, but that money has not been spent.
The two reactors are years behind schedule and billions of dollars over budget.
The Energy Department letter comes as Georgia state lawmakers sound the alarm about cost overruns at the site. The lawmakers said they want a “cost cap” established to protect Georgians from getting gouged on their electricity bills.
In August, the plant’s owners, which include Georgia Power, Oglethorpe Power Corporation and Municipal Electric Authority of Georgia, learned that the plant would require an additional $2.3 billion, bringing the total cost estimate to $27 billion.
That new overage initiated a clause in the ownership agreement where ninety percent of ownership must agree to move forward. A down vote from any one of those organizations would mean the multibillion-dollar project is abandoned.
Georgia Power’s parent company, Southern Company, pledged that its shareholders would absorb its share of the costs. That leaves Oglethorpe Power and MEAG with a decision: pay up or pull out.
The letter lawmakers sent Wednesday was signed by 20 members of the Georgia General Assembly, including Rep. Terry England, chairman of the House appropriations committee, and Sen. Butch Miller, president pro tempore of the Senate. It said that unlike Georgia Power, the other organizations “don’t have the luxury of shareholders to absorb these additional costs and will have to increase rates even higher.”
They asked the owners to “ensure prior to voting in support of moving forward ... that a cost cap is established to protect all Georgia electric ratepayers from this and future overruns.”
But Gov. Nathan Deal took a different stance. A day before the lawmaker’s letter was sent, Deal sent a letter to Oglethorpe Power encouraging completion of the project.
“Given the project’s critical economic impact to the State of Georgia, I strongly encourage (the project’s) co-owners to continue work and complete the construction,” Deal said. “I am counting on the project co-owners to follow through on the commitments you made to the citizens of Georgia, ratepayers and myself.”
The plug was pulled on a similar project in neighboring South Carolina in July 2017 when the V.C. Summer plant was abandoned after going billions of dollars over.
Daly reported from Washington.