Under the deal announced Tuesday, reactor designer Westinghouse Electric Co. will buy the nuclear construction business of Chicago Bridge & Iron Co. for $229 million, with the outgoing contractor writing off more than $1 billion in losses. Westinghouse, a Toshiba Corp. unit, will lead construction at Plant Vogtle (VOH'-gohl), hiring Fluor Corp. to manage work.
Southern Co. subsidiary Georgia Power and its Vogtle co-owners will pay more than $550 million to settle claims against them by Westinghouse and CB&I over who's responsible for delays at the Waynesboro site.
Georgia Power, which owns 46 percent of the plant, will pay $350 million. Oglethorpe Power Corp., which provides power to 38 electrical cooperatives across Georgia, will pay $230 million. The Municipal Electric Authority of Georgia and the city of Dalton own smaller shares.
Westinghouse will also take over construction of two reactors at the V.C. Summer plant near Jenkinsville, South Carolina, owned by Scana Corp. and public power provider Santee Cooper. Finally, Westinghouse, which is trying to promote construction of standardized nuclear reactors worldwide, will take over construction of reactors in China. CB&I will continue to provide some parts.
Scana said its costs at Summer would rise by $286 million, while Santee Cooper's costs will rise $112.5 million.
Southern Co. CEO Tom Fanning said Wednesday that the settlement of the Vogtle lawsuits "removes a really big overhang from the company."
He said Southern Co. faced up to $1.5 billion in potential liability. "Sixteen cents on the dollar is what we settled for," Fanning said.
Ratepayers could eventually pay for the $350 million settlement if Georgia regulators approve. Fanning said Georgia Power predicts that rates will rise about 2.5 percent total over the next three years to cover Georgia Power's share of the remaining costs of the plant. Rates have already risen 4.5 percent.
"We think now, even with these new costs, the increased bills will be less than 7 percent," Fanning said.
Vogtle's first reactor is now scheduled for completion in June 2019, with a second following in June 2020. Summer's completion dates were pushed back by two months to Aug. 31, 2019 and Aug. 31, 2020. The owners of both reactor complexes are trying to start making power in time to claim federal tax credits.
Fanning said a new agreement with Westinghouse will decrease the contractor's ability to pass on increased costs to Georgia Power and other owners. Fanning and Scana said that Westinghouse would be able to claim substantial payments by meeting the current deadlines.