Toshiba to complete Vogtle parent guarantee payments
A new agreement with Toshiba will see the owners of the Vogtle nuclear construction project receive all remaining scheduled payments under the project's parent guarantee by 15 December. To date, Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities have received scheduled payments worth $455 million in total, with $3.2 billion still to be paid.
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.
Toshiba in July 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. The first payments under both guarantees were made in October.
The agreement must satisfy conditions including approval by Toshiba's board of directors and the US Department of Energy before it becomes binding.
Georgia Power chairman, president and CEO Paul Bowers said the company was pleased to have reached a "constructive agreement" with Toshiba regarding the parent guarantees. "We remain committed to making the right decisions for our state's energy future and continue to believe that completing both Vogtle units represents the best economic choice for customers and preserves the benefits of carbon-free, baseload generation for Georgia electric customers," he said.
Oglethorpe Power president and CEO Mike Smith said: "This agreement is a very positive development that will provide a significant payment upfront to help cover our portion of the costs to complete Vogtle Units 3 and 4."
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.
Researched and written
by World Nuclear News
