Georgia Power Reaches Agreement with Toshiba to Receive All Remaining Vogtle Payments by December 15th
Wednesday, December 6th, 2017
Georgia Power announced that it has reached a new agreement with Toshiba, the parent company of former primary Vogtle contractor Westinghouse, to receive all remaining scheduled payments from Toshiba in the amount of $3.2 billion by Dec. 15, 2017. Georgia Power's proportionate share of the payments is approximately $1.47 billion. To date, the Vogtle co-owners (Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities) have received $455 million in total scheduled payments from Toshiba under the parent guarantee for the Vogtle project – a structure which was put in place to protect Georgia electric customers as part of the original contract.
The agreement will only become binding upon satisfaction of certain conditions including, but not limited to, approval of Toshiba's board of directors and receipt of U.S. Department of Energy approval.
"We are pleased to have reached this constructive agreement with Toshiba regarding the parent guarantees for the Vogtle project and every dollar will be used to benefit our customers," said Paul Bowers, chairman, president and CEO of Georgia Power. "We remain committed to making the right decisions for our state's energy future and continue to believe that completing both Vogtle units represents the best economic choice for customers and preserves the benefits of carbon-free, baseload generation for Georgia electric customers."
From the beginning of the Vogtle expansion, Georgia Power has worked to pursue all available benefits for customers and minimize the impact of the new units on electric bills. In addition to securing 100 percent of the funds available from Toshiba, the company recently announced a conditional commitment of approximately $1.67 billion in additional loan guarantees for the project from the DOE. Today, after including 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.
Final approval and issuance of the additional loan guarantees by the DOE cannot be assured and are subject to the negotiation of definitive agreements, completion of due diligence by the DOE, receipt of any necessary regulatory approvals, and satisfaction of other conditions.
Vogtle Project Review Underway
On August 31, Georgia Power filed a recommendation with the Georgia Public Service Commission to continue construction of the Vogtle nuclear expansion supported by all of the project's other co-owners. The recommendation was based on the results of a comprehensive schedule, cost-to-complete and cancellation assessment launched following the bankruptcy of Westinghouse in March. Receiving all remaining parent guarantee payments from Toshiba further strengthens the recommendation and will eliminate one of the greatest risks for continuing construction of the only new nuclear units currently under construction in the United States.
The Georgia PSC is reviewing the recommendation and is expected to make a decision regarding the future of the Vogtle 3 and 4 project as part of the 17th Vogtle Construction Monitoring proceeding.