January 20, 2022 (IEEFA)—Once estimated at more than $14 billion, the price tag for two new reactors at Georgia Power Company’s Plant Vogtle site has now climbed past $30 billion, and both units will be more than six years late in coming online, according to a report by the Institute for Energy Economics and Financial Analysis.
The Georgia Public Service Commission staff and its nuclear consultants have attributed the project’s massive cost overruns and repeated delays to Georgia Power’s adoption of unreasonable and unachievable construction schedules, as well as its attempts to achieve the schedules at any cost. The issues have been blamed on a corporate culture that values production over quality; poor or non-existent quality inspections; high personnel turnover; and high testing failure rates for an unproven reactor design.
“The company was warned back in 2008 that using a new unproven reactor design from Westinghouse for the new Vogtle reactors was likely to lead to cost overruns and major schedule delays,” said David Schlissel, the report’s author and IEEFA’s director of resource planning and analysis. “However, the company challenged and the commission disregarded these warnings.”
Last year was difficult for the Vogtle project. Even though the project costs have risen rapidly, the projected online date has slipped over the last year at a rate of roughly one month per calendar month of work. As of January 2021, Georgia Power estimated it would need $2.5 billion more to finish building the new reactors. However, after spending $1.9 billion during the first nine months of the year, it increased its estimate for completing the job to almost $2.7 billion.
“There is clear evidence that Vogtle 3 and 4 will be very expensive sources of power,” Schlissel said. “Our analysis found the costs of power from Vogtle 3 and 4 will be five times as expensive as the same amount of electricity obtained from renewable sources, such as a solar-plus-battery-storage facility.”
But Georgia’s utility customers won’t only be paying for the new Vogtle units for the 60 years after they go into service. Customers have already paid more than $3.5 billion in financing costs for the project since 2011, or more than 11 years before either of the new units will produce any electricity for them. The public service commission staff expects the figure will grow to $4 billion by the time the two units are completed.
“Georgia Power has repeatedly misled the public service commission and its staff about the project’s likely cost and schedule and the costs to customers will be extremely high,” Schlissel said. “The commission denied rate recovery for $951 million of the cost overruns at Vogtle 1 and 2; it should deny rate recovery for a much larger share of the far more expensive Vogtle 3 and 4.”
Full Report: Southern Company’s Troubled Vogtle Nuclear Project
David Schlissel ([email protected]) is IEEFA director of resource planning and analysis
Vivienne Heston ([email protected]) is IEEFA’s strategic communications director.
About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. IEEFA’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.