Vogtle owners receive full payment from Toshiba
Toshiba has completed the early payment of $3.225 billion, reflecting the remaining outstanding amount of its $3.68 billion parent company guarantee obligation to the owners of the Vogtle nuclear construction project in the USA. The company is negotiating the settlement of the full guaranteed amount due to the owners of the VC Summer project.
Japan's Toshiba is the parent company of former Vogtle primary contractor Westinghouse. Parental guarantee obligations were agreed by Toshiba and the owners of the two US AP1000 construction projects - Vogtle and VC Summer - in 2008, when orders for the units were first placed with Westinghouse.
Following Westinghouse's filing for chapter 11 bankruptcy protection with the US courts in March, Toshiba agreed in June to pay a maximum of $3.68 billion to the owners of Vogtle - Georgia Power (45.7%), Oglethorpe Power (30%), MEAG Power (22.7%) and Dalton City (1.6%) - with payments to be made in instalments from October 2017 to January 2021.
Earlier this month, Toshiba said it had reached a new agreement with the owners under which they would receive all remaining scheduled payments under the parent guarantee by 15 December.
Toshiba announced today that it had paid the outstanding sum to Southern Company subsidiary Georgia Power in its role as agent for the owners.
"With the payment, Toshiba eliminates future risk of foreign currency fluctuations, while the redemption of the parent company guarantee obligation gives it the right to pursue claims against Westinghouse for the amount paid to the Vogtle owners," the company said.
Toshiba plans to "reduce its internal resources that it must allocate to Westinghouse's rehabilitation proceedings" by selling the claims to a third party. It hopes to sell the claims - together with assets that include debts Toshiba holds against Westinghouse and other Westinghouse-related companies that filed for Chapter 11 bankruptcy protection - by the end of March 2018.
Georgia's Public Service Commission (PSC) is in the process of considering a recommendation from Vogtle's owners to continue with construction of the two AP1000 units. The recommendation was reached after a schedule, cost-to-complete and cancellation assessment, but PSC public interest advocacy staff have filed testimony questioning the economics of the project.
The PSC expects to issue a decision on the future of the Vogtle project on 6 February. Meanwhile, work continues on the two AP1000 reactors under construction at the site near Waynesboro, Georgia, with Bechtel managing daily construction efforts under Southern Nuclear's direction. Vogtle unit 3 is currently expected to start commercial operation in November 2021 and unit 4 in November 2022.
In July, Toshiba agreed to pay a maximum of $2.168 billion to Scana subsidiary South Carolina Electric & Gas and Santee Cooper under the parental guarantee for the VC Summer construction project. The owners subsequently decided to cease construction of the South Carolina plant.
Toshiba said it is in discussions with the owners of the Summer claims about the terms and conditions required for full payment of the guaranteed amount.
Researched and written
by World Nuclear News
