U.S. Department of Energy Approves Toshiba Agreement to Deliver $3.2B in Remaining Payments for Vogtle Project
Monday, December 11th, 2017
The U.S. Department of Energy has issued the final approval needed for Georgia Power's 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 approximately $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.
"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 when the agreement was announced on Dec. 5. "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."
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 Westinghouse bankruptcy. The Georgia PSC is reviewing the recommendation to move forward 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. Read the 17th VCM Report here and recent comments from Georgia Power Chairman, President & CEO Paul Bowers to the Georgia PSC here.
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 the agreement to receive 100 percent of parent guarantee funds available from Toshiba by Dec. 15, 2017, the company recently announced a conditional commitment of approximately $1.67 billion in additional loan guarantees for the project from the U.S. Department of Energy. 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.