Blaming lagging power-cable remediation work at Vogtle Unit 3 and an ongoing shortage of craft labor, Georgia Power in late October again revised the estimated completion dates for its two under construction nuclear plants.
The announcement of schedule extensions—and climbing construction costs—for the long-delayed nuclear expansion project in Waynesboro, Ga., comes as project co-owners contend that cost-cap measures put in place in 2018 to protect them from further unexpected financial impacts had been triggered.
The utility—which announced a revised Vogtle schedule roughly two months ago—again pushed back each plant’s respective estimated completion date by three months.
The latest adjustment extends Unit 3’s completion target from the second quarter of 2022 to the third quarter. Similarly, Unit 4’s expected completion was moved back to the second quarter of 2023, from first quarter.
The Vogtle construction site’s recent spike in COVID-19 cases also challenged the project’s progress, said Georgia Power.
Causes for Delays
During Southern Co.'s third-quarter earnings call on Nov. 4, Chairman and CEO Thomas A. Fanning reported that recent “walk downs” of the Unit 3 site found more installed electrical cable raceway systems needing mandated remediation than the utility had expected by this time.
The need for the Unit 3 remediation had been documented after the U.S. Nuclear Regulatory Commission in August announced that “Southern Nuclear did not adequately separate safety and non-safety-related cables.”
Fanning noted that the Unit 3 schedule change also was due to “the impact on productivity resulting from higher-than-expected attrition and slower-than-expected onboarding of new electricians, field engineers and supervisors.”
That workforce shortage at Unit 3 is hindering work on the other unit as well, as “craft labor and support resources have been temporarily shifted to support Unit 3’s completion effort,” Fanning said in explaining Unit 4’s new in-service target date.
Fanning said: “Importantly, with the corrective actions the site has implemented after discovery of the unit quality issues, including reinforcement of the importance of first-time quality with craft personnel and improvements to the application of [site contractor] Bechtel’s quality program, we believe that as we turn systems over on Unit 4, the amount of remediation work required will be less than what we experienced on Unit 3.”
Were Cost Caps Triggered?
In September 2018, amid rising cost estimates and increasing uncertainty as to whether the Vogtle project would continue to move forward—and pressure from project owner Oglethorpe Power Corp.—Georgia Power reached an agreement with the other co-owners that placed an incrementally greater financial burden on Georgia Power should the project have future cost increases of more than $800 million.
Georgia Power owns 45.7% of the project, while Oglethorpe’s stake is 30%. The Municipal Electric Authority of Georgia (MEAG) owns 22.7% of the project, with the remaining 1.6% share held by Dalton Utilities.
Currently, Georgia Power and Oglethorpe are at considerable odds over whether that threshold has been met.
In a response to questions after the company’s Nov. 4 quarter results presentation, Daniel S. Tucker, Southern executive vice president and CFO, stated: “Just very matter of factly, as we disclosed, our calculations suggest we’re not even into the first band” of increasing cost percentage shares for Georgia Power.
Nevertheless, a statement from Georgia Power reports that the parties have entered into another agreement to figure it out, noting that “the Unit 3 and 4 co-owners have some differences of opinions on how to interpret the agreement we entered into in 2018.”
The utility adds that the differences are “primarily around the starting point for calculating the level of sharing costs, and the treatment of COVID costs,” according to the statement.
Of the ongoing talks, Georgia Power’s statement added that “all parties are working constructively” to resolve their differences.
Contacted by ENR for comment, a spokesperson for Oglethorpe Power Corp. said the utility would provide an update on the Vogtle project in its next 10-Q filing, scheduled for Nov. 12.
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