Vogtle nuclear reactors face "significant challenges"

Georgia Power’s proposed twin 1,100 MW nuclear reactors at Plant Vogtle face “significant challenges” to remain on budget because of a possible delay in obtaining a key license to start major construction, according to an independent evaluator hired by Georgia regulators to monitor progress on the project.

William Jacobs said the utility may not get a combined operating license from the Nuclear Regulatory Commission until late December 2011 or early 2012. Possible schedule delays would affect the financing cost of the project. Jacobs made the claims in a report filed June 16 with state regulators.

Jacobs said Georgia Power hasn’t accounted for change orders that could “significantly impact the direct construction costs of the project.” He listed possible cost impacts in his testimony, although those numbers were redacted.

Georgia Power wants to build two 1,100 MW Westinghouse AP1000 nuclear reactors at Vogtle. The units are scheduled to start operating in 2016 and 2017. Oglethorpe Power, the Municipal Electric Authority of Georgia and Dalton Utilities are other project partners. The Public Service Commission has approved a $6.1 billion budget for Georgia Power’s share of the project.

In April, Georgia regulators ordered Georgia Power to show why its profit margin should not be reduced if the proposed addition of two nuclear reactors at its Plant Vogtle site goes over budget.

Regulators were to vote on a risk-sharing plan recommended by the agency’s staff. According to the Atlanta Business Chronicle, the plan calls for trimming Georgia Power’s profit margin on the project if construction costs rise $300 million or more above the utility’s planned $6.1 billion investment. If the project comes in $300 million or more under budget, Georgia Power would be allowed a higher profit margin.

But in a letter to the PSC dated March 29, an attorney representing Georgia Power argued the risk-sharing plan is illegal because it would penalize the utility for results beyond its control and disallow costs already approved by the commission as prudently incurr

In hist June 16 report, the regulatory commission's consultant said the construction partners are a few months behind a guaranteed completion date of April 1, 2016. Jacobs said the group is working to get back on schedule. He said that with extensive licensing, engineering and construction challenges, “it is very possible that the project could come in over budget and potentially miss the commercial operation dates.”

Jacobs said the NRC’s delay is related to issues with the reactor that Georgia Power wants to install. The NRC has asked Westinghouse for additional analysis on parts of the new AP 1000 design, which may push back the schedule.

Georgia Power spokesman Jeff Wilson was quoted in local news reports as saying he still expects the utility to get the license by the end of the year and that major construction could start after that.

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