Southern Co. executives have again pushed back the tentative completion dates of the third and fourth units of Georgia Power’s Vogtle nuclear power plant after finding recently that thousands of inspection records for the project were missing or incomplete.
More than 7,000 workers are on site at the Vogtle site, which lies southeast of Augusta, Georgia, and will deliver the first new nuclear units in the United States in about three decades when completed. The Southern team has repeatedly had to revise its cost estimates and extend its completion targets – in mid-2019, their plans called for Unit 3 to come into service last November and unit 4 late this year but had already pushed back those dates – and have now added another three to six months to their timeline. On Feb. 17, as part of reporting their fourth-quarter results, Southern Chairman, President and CEO Tom Fanning and CFO Daniel Tucker said Unit 3 is now expected to come into service in either the fourth quarter of this year or the first three months of 2023. Unit 4 is forecast to follow in late 2023.
“I am frustrated about it, but it is something we have to do,” Fanning said of the meticulous materials and equipment tracking needed to finish construction. “We talk about, ‘This is the first plant we’ve constructed in 40 years.’ Well, this is the first nuclear documentation we’ve had to do in 40 years. I wish we had found it sooner. We just didn’t.”
Fanning told analysts and investors on a conference call Southern and its partners on Vogtle are addressing “a backlog of tens of thousands of inspection records needing completion to support system turnovers” and have worked through about 30% of that load in recent weeks. At the same time, he added, workers have loaded all of Unit 3’s fuel assemblies and are 92% through construction of Unit 4.
Still, the delays come with a hefty price tag: Southern has record an after-tax charge to its earnings of $686 million and Georgia Power could be required to take on another $460 million of incremental costs.
Fanning and Tucker’s capital spending plans beyond Vogtle were more upbeat: Southern’s investment plans now call for the company to spend $32.8 billion by the end of 2025, which is up $2 billion more than a year ago. And beyond that, Tucker said the company could add up to $3 billion more in spending – about $1.5 billion of that loosely allocated to 2024 through 2026 – from its Southern Power unit on projects in renewable energy, storage, transmission, grid resiliency or other areas.
Investors took word of the delay in stride: Shares of Southern (Ticker: SO) recovered their early losses during the Feb. 17 trading session and closed essentially flat. They are down slightly over the past six months.