Federal loan guarantees mark latest milestone in historic Vogtle project Customers to receive $225 million to $250 million in benefits
ATLANTA, Feb. 20, 2014 /PRNewswire/ -- Georgia Power announced today that it has completed the closing process for $3.46 billion in loan guarantees from the U.S. Department of Energy (DOE) toward the construction of Plant Vogtle units 3 and 4, near Waynesboro, Ga. By securing the federal loan guarantees, Georgia Power expects to be able to provide $225 million to $250 million in present-value benefits to its customers. The closing was commemorated at the project site today with U.S. Secretary of Energy Dr. Ernest Moniz joining company leadership for a special presentation and tour of the expansion.
The expansion at Plant Vogtle represents a multi-billion dollar capital investment in Georgia and, when completed, will make Plant Vogtle the only four-unit nuclear facility in the country. The construction of the new units is the largest job-producing project in the state, employing approximately 5,000 people during peak construction and creating 800 permanent jobs when the plant begins operations.
"The agreement with the DOE is an important milestone for the project and one that will create significant savings for our customers," said Paul Bowers, president and CEO of Georgia Power. "The Vogtle units 3 and 4 project is more than 50 percent complete and, when fully operational in 2018, will help to secure the state's energy future and drive economic growth by providing needed energy for new homes and businesses across Georgia for the next 60 years."
"We see ourselves as one part of a team of multiple parts of the private sector and governments needed to see major projects succeed," said Sec. Moniz during today's ceremony. "This energy infrastructure buildout is not only for Georgia, not only for the United States, but for the world."
The construction of Plant Vogtle units 3 and 4 continues to be the most economic choice for meeting Georgia's future energy needs, and the securing of the federal loan guarantees builds on the Company's commitment to pursuing the best financing options for both customers and the project. As a result of the loan guarantees, Georgia Power will have access to lower interest rates for the project than it would otherwise be able to obtain, which will result in savings the Company can pass along to Georgia customers. The total impact on customer rates once the units are in service is currently projected to be between 6 and 8 percent, substantially less than the 12 percent rate impact originally contemplated for capital costs at the time of project certification in 2009. This reduction is due to the inclusion of the federal loan guarantees combined with construction work in progress (CWIP) in the company's rate base, relative fuel savings, and eligibility for production tax credits resulting from the completion of major milestones.
The project has marked substantial progress over the past 12 months with milestones including the placement of nuclear concrete for both units 3 and 4, the containment vessel bottom head and the reactor vessel cavity (CA-04 module) for Unit 3, as well as many others. In just a year, the site has undergone significant "vertical progress," and is beginning to mirror the existing units at Plant Vogtle with the Unit 3 cooling tower currently rising more than 200 feet high. The company is also commencing its transition to operations as early as possible, with licensed operator training well underway, as well as other startup activities in preparation to connect to the grid for commercial operation.
Southern Nuclear, a subsidiary of Southern Company, is overseeing construction and will operate the two new 1,100-megawatt AP1000 units for Georgia Power and co-owners Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia and Dalton Utilities. Georgia Power owns 45.7 percent of the new units with its share of the project currently projected at approximately $6.8 billion, including approximately $2 billion of financing costs to be collected during construction.
About Georgia Power
Georgia Power is the largest subsidiary of Southern Company (NYSE: SO), one of the nation's largest generators of electricity. Value, Reliability, Customer Service and Stewardship are the cornerstones of the company's promise to 2.4 million customers in all but four of Georgia's 159 counties. Committed to delivering clean, safe, reliable and affordable energy at rates below the national average, Georgia Power maintains a diverse, innovative generation mix that includes nuclear, 21st century coal and natural gas, as well as renewables such as solar, hydroelectric and wind. Consistently recognized as a leader in customer service, Georgia Power was recently ranked highest in overall business customer satisfaction among large utilities in the South by J.D. Power and Associates. For more information, visit www.GeorgiaPower.com and connect with the company on Facebook (Facebook.com/GeorgiaPower) and Twitter (Twitter.com/GeorgiaPower).
Cautionary Note Regarding Forward-Looking Statements:
Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning customer savings, projected cost and schedule for the completion of construction projects, benefits of ongoing construction projects and job creation. Georgia Power Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Georgia Power Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Georgia Power Company's Annual Report on Form 10-K for the year ended December 31, 2012, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; ability to control costs and avoid cost overruns during the development and construction of facilities, which include the development and construction of facilities with designs that have not been finalized or previously constructed, including the impact of factors such as labor costs and productivity, adverse weather conditions, shortages and inconsistent quality of equipment, materials, and labor, or contractor or supplier delay or non-performance under construction or other agreements, delays associated with start-up activities, including major equipment failure, system integration, and operations, and/or unforeseen engineering problems; ability to construct facilities in accordance with the requirements of permits and licenses and to satisfy any operational and environmental performance standards; state and federal rate regulations and the impact of future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; regulatory approvals and actions related to the Plant Vogtle expansion, including Georgia Public Service Commission approvals and Nuclear Regulatory Commission actions; the inherent risks involved in operating and constructing nuclear generating facilities, including environmental, health, regulatory, natural disaster, terrorism, and financial risks; the ability of counterparties of Georgia Power Company to make payments as and when due and to perform as required; interest rate fluctuations and financial market conditions and the results of financing efforts, including Georgia Power Company's credit ratings; and the impacts of any potential U.S. credit rating downgrade or other sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the benefits of U.S. Department of Energy loan guarantees. Georgia Power Company expressly disclaims any obligation to update any forward-looking information.
SOURCE Georgia Power