Vogtle owners vote to continue construction

The co-owners of the AP1000 construction project - the only new nuclear units currently under construction in the USA - were required to vote on the future of the project under the terms of the Vogtle Joint Ownership Agreement after increases in estimates for the total project budget of over USD1 billion earlier this year. This triggered a Project Adverse Event (PAE) under the terms of the agreement, as did a decision by Georgia Power not to seek recovery of its share of the latest cost increase via the Georgia Public Service Commission (PSC). A vote by all owners was mandated under the terms of the agreement, with at least 90% of the interest required to be in favour for construction to continue.

Georgia Power, which owns 45.7% of the project, MEAG Power (22.7%) and Dalton Utilities (1.6%) had already voted for construction to continue. Yesterday, after several extensions to the original 24 September voting deadline, Oglethorpe (30%) also voted to continue.

In connection with the vote, the co-owners have agreed to amend the Joint Ownership Agreement to obligate each co-owner to pay its proportionate share of construction costs up to an estimated cost at completion (EAC) of USD8.4 billion - the cost filed earlier this year with the Georgia PSC - plus USD800 million of additional construction costs. Georgia Power will be responsible for 55.7% of any additional construction costs of USD800 million to USD1.6 billion above that, and for 65.7% of any construction costs that exceed the EAC by USD1.6-2.1 billion. Ahead of its vote to continue with the project, had Oglethorpe called for protection against future cost increases.

The provisions of the Vogtle Joint Ownership Agreement concerning PAEs will be amended so that future increases in construction cost estimates will no longer trigger a vote to enable construction to continue. Georgia Power would be able to cancel the project at any time, at its sole discretion, under the revised agreement.

"We are all pleased to have reached an agreement and to be moving forward with the construction of Vogtle Units 3 & 4 which is critical to Georgia's energy future," the co-owners said yesterday. "While there have been and will be challenges throughout this process, we remain committed to a constructive relationship with each other and are focused on reducing project risk and fulfilling our commitment to our customers."

Maria Korsnick, president and CEO of the US Nuclear Energy Institute, said the votes in support of continued construction of the two units were a "forward-looking affirmation" of the need for reliable and clean new electricity generation. "The project represents more than just another power plant project, and nuclear energy represents more than just another energy option," she said.

US Department of Energy spokesperson Shaylyn Hynes said: "This historic project will be the first large-scale nuclear utility project completed in the United States in over 30 years and will reaffirm America's international leadership in nuclear technology and provide a reliable, clean power source for decades to come. DOE hopes the successful completion of this project will mark the beginning of a nuclear renaissance in America."

The first AP1000 unit - Sanmen unit 1 - entered commercial operation in China on 21 September. Sanmen 2 and Haiyang 1 have also been connected to the grid, while China's fourth AP1000, Haiyang 2, is expected to start up in 2019.

Vogtle 3 is currently scheduled to enter service by November 2021 and unit 4 by November 2022.