ATLANTA – Customer costs will continue to mount for the construction of two nuclear reactors at Plant Vogtle even if regulators reject cost overruns, Georgia Power Co. executives testified Tuesday.
The testimony was the first from the utility’s representatives since it acknowledged in February that construction is over budget and 18 months behind schedule. They had asked the Public Service Commission to certify the higher cost but eventually withdrew that request when commissioners indicated they preferred to postpone the issue until the reactors are producing electricity.
Tuesday, the executives said even without certification for a higher price tag, customers will still pay more for a couple of reasons. First, the borrowing costs keep mounting on Georgia Power’s share of the plant until its operations can begin to cover that expense.
“There will be additional financing costs to our customers due to the delay,” said Alison Chiock, the company’s director of resource policy and planning.
Second, the cost to generate electricity through other means until the new reactors begin is another expense beyond what was originally projected, she said.
But she cautioned a commission lawyer questioning her.
“You lose sight of the 60-year benefit when you sit here in 2015 and focus on those schedule changes,” she said.
Over the estimated life the new reactors, customers will come out about $3 billion ahead of what it would cost to build a natural-gas generating plant instead, she said. However that lifespan benefit shrank by $2 billion just since the last semiannual construction-monitoring report due to a drop in the price of natural gas.
So far, the company has spent a total of $2.96 billion on construction, which is about 25 percent complete. It is asking the commission to approve the $169 million spent in second half of last year. The commission will vote Aug. 18 on this latest installment, taking more testimony before then from the company and groups representing various customers.
Much of the testimony Tuesday centered on the reasons for cost overruns, even though the commission won’t consider them until both reactors are running, expected to be 2020.
Company Vice President David McKinney explained that a contract with the builder, Chicago Bridge & Iron, holds it to the original price and completion date, which would have been 2017, but that it allows for increases caused by regulation changes. One of those changes is less than $1 million added because of the Affordable Care Act for the 5,500 construction workers on site, but he noted that using modular construction means there are fewer than the 12,000 workers needed for on-site construction of Vogtle’s first two reactors in the 1980s.
Another costly regulation change is for cybersecurity protections for the plant’s electronics to meet Nuclear Regulatory Commission instructions issued after the contract was signed. Even legal costs are rising because of the added construction period.
The project is about 14 percent over budget, he said. While the builder has made up ground on some parts of its schedule, it has slipped in others, said McKinney who brushed away questions about future delays.
“We’re not here to predict performance, but we do think this schedule is achievable,” he said.