NRC grants Combined Operating Licenses for Plant Vogtle

Southern Co. (NYSE: SO) can now proceed with full construction of the first new nuclear power plant in the U.S. in more than 30 years, a process that began in early 2004 and is expected to cost $14 billion.

“Today marks the culmination of almost seven years of hard work,” said Paul Bowers, Georgia Power president and CEO.

On Feb. 9, the Nuclear Regulatory Commission voted 4-1 to give the Southern Co.-led consortium a combined construction and operating license (COL) for two additional units at the Vogtle site, about 26 miles south of Augusta, Ga. NRC Chairman Gregory Jaczko was the lone dissenter on the decision. Jaczko reportedly voted against the license, saying the new units should include recommendations from the NRC’s post-Fukushima task force.

The NRC found the staff’s review adequate to make the necessary regulatory safety and environmental findings, clearing the way for the NRC’s Office of New Reactors to issue the COLs.  The approval marks the first ever construction license issued for a U.S. nuclear plant since 1978, a year before the Three Mile Island accident.

“Today is a historic day for Southern Co. and Georgia Power Co.,”said Tom Fanning, Southern Co. chairman, president and CEO. “But I think moreover, it marks a monumental occasion for the citizens that we serve in the Southeast.”

The existing 2,430 MW, two-unit plant and the expansion is jointly owned by Georgia Power, a subsidiary of Southern Co., OglethorpePower Corp., MunicipalElectric Authority of Georgia and Dalton Utilities.

In January 2006, Southern Co. selected the Westinghouse AP1000 reactor for both new units, Units 3 and 4. The AP1000 is a Generation III+ 1,154 MWe pressurized water reactor that uses passive safety systems. It is the first Gen. III+ reactor to receive design certification from the NRC. The NRC certified the AP1000 design on Dec. 30, 2011. Passive safety, also known as passive cooling, requires no sustained operator action or electronic feedback to shut down the plant safely in the event of an emergency. The AP1000 is equipped with water tanks, which can be emptied into the reactor vessel itself or into containment to flood in and around the reactor vessel. Instead of relying on pumps, the operators can rely on gravity once the fail-safe valve is opened. The NRC did impose a condition on the COLs requiring inspection and testing of squib valves, a component of the reactors’ passive cooling system.

“These two units will set the standard for safety and efficiency in the nuclear industry in America today,”said Fanning.

The Shaw Group  (NYSE: SHAW) and Westinghouse are building four nuclear units in the U.S., with two units each at Plant Vogtle and South Carolina Electric & Gas’ V.C. Summer Nuclear Generating Station. Two more units are under contract for Progress Energy in Florida.

“Shaw congratulates Southern on this major milestone for the Vogtle project, the first new U.S. nuclear construction commercial power project in more than 30 years,” said J.M. Bernhard Jr., Shaw’s chairman, president and chief executive officer. “Shaw is proud to be part of such a historic project. Not only is this milestone another step forward in continuing to provide safe, clean and reliable energy for the future, but the project also will create thousands of jobs and provide numerous long-term benefits for the Georgia community. “

Westinghouse also gave their congratulations.

“Westinghouse applauds the NRC’s decision to grant Southern Company and Georgia Power a COL, paving the way for a new generation of safe, clean and reliable electricity in the United States,” said Aris Candris, president and CEO of Westinghouse Electric Co.

Fanning said Southern Co. has invested about $20 billion in building a diverse energy portfolio, which includes nuclear, 21st century coal, gas, renewable and energy efficiency. This goes hand-in-hand with President Obama’s statement in the most recent State of the Union address in which he said the U.S. needs an “all of the above” energy strategy.

“No single technology will meet our requirements,” said Fanning. “But we believe that within this portfolio, nuclear energy is a dominant solution.”

Loan Guarantee

On Feb. 16, 2010, President Obama awarded the first loan guarantee for a nuclear plant under provisions of the Energy Policy Act of 2005. The award of $8.3 billion for the two additional reactors at the Vogtle plant in Georgia was conditional until the plant received the COL from the NRC.

“The financing and cost recovery attributes of this project are completely different than where we are in the past,” Fanning said.

Fanning said the Unit 3 and 4 projects are completely different projects than the Units 1 and 2 projects, which resulted in cost overruns when being built in the 70s and 80s.

During the 10-year construction period, the average price increase remaining from today to in-service in 2016-2017 is going to be about 1 percent per year, with a gross amount of roughly 9 percent.

“Once the project goes into service, nuclear generation has some wonderful attributes. One is that the energy is exceedingly cheap,” said Fanning.

On a kWh basis, Fanning said nuclear power generation is about 0.7 cents. He said coal- and gas-fired generation is roughly 5 to 6 cents per kWh. The net increase to rate payers once Unit 4 is in service is expected to be somewhere around 5 or 6 percent.

Southern Co. is still working out the details on the loan guarantee process. Fanning said they expect to close the loan guarantee process in the 2nd quarter of 2012.


After the meltdowns at the Fukushima Daiichi nuclear power plant in Japan, the future of nuclear in the U.S. appeared uncertain. The NRC created a task-force to provide recommendations to the industry for post-Fukushima safety.

“The events at Fukushima are taken into account every day and will be taken into account for years to come,” said Fanning. “The NRC’s process has been thoughtful, it has been thorough and it is complete. It delivered a regime of safety oversight and accountability that our communities rightfully deserve. Safety comes first.”

Although construction is commencing without the completion of the task force’s recommendations, Fanning said Southern Co. will follow through and adopt any improvements in the future. The nuclear industry recognized the importance of the disaster in Japan and reacted. But Vogtle is not in the same situation as the Fukushima Daiichi plant, Fanning said.

“We are some 130 miles from the coastline, we are 200 feet above sea level, we are not in a seismic-sensitive area and as I said before, the technology we are putting in place is the newest, safest technology in the nuclear industry in the world today. It is a completely different circumstance than Fukushima,” he said.

Unit 3 is expected to come online in 2016 and Unit 4 in 2017. Today, there are 2,000 workers on-site. Southern expects to have 5,000 workers on-site by 2013. When complete, the plant will provide 800 permanent jobs.

“The $14 billion project is a tremendous boost to Georgia,” said Bowers. “This project is going to put people to work.”

In total, the Plant Vogtle project will create up to 25,000 direct and indirect jobs, he said.

“It is time now to go build this plant,” said Bowers.

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