ATLANTA, June 9, 2017 /PRNewswire/ -- Georgia Power, the largest electric subsidiary of Southern Company, has entered into a new agreement with Toshiba, the parent company of Vogtle contractor Westinghouse. The agreement, approved by the U.S. Department of Energy, affirms the value of Toshiba's guarantee at $3.68 billion – providing additional protections for Georgia electric customers following Westinghouse's March bankruptcy. Additionally, Georgia Power and Westinghouse have finalized a new service agreement which allows for the transition of project management at the Vogtle expansion from Westinghouse to Southern Nuclear and Georgia Power. The service agreement is subject to approval of the Westinghouse Board of Directors and certain other conditions, including bankruptcy court approval. The project is co-owned by Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities.
"We are pleased with today's positive developments with Toshiba and Westinghouse that allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power," said Paul Bowers, chairman, president and CEO of Georgia Power. "We are continuing to work with the project's Co-owners to complete our full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for our customers."
"We are happy to have Toshiba's cooperation in connection with this agreement which provides a strong foundation for the future of these nuclear power plants," said Thomas A. Fanning, chairman, president and CEO of Southern Company.
In addition to affirming the value of $3.68 billion in parent guarantees from Toshiba, the new agreement also adds clarity on the timing and form of payments for that obligation. Parent guarantees were put in place to protect Georgia electric customers as part of the original contract and the first payment under the new agreement is due from Toshiba in October 2017.
The scope of the service agreement with Westinghouse includes engineering, procurement and licensing support, as well as access to Westinghouse intellectual property needed for the project. The agreement will take effect after approval of the bankruptcy court and rejection of the current engineering, procurement and construction contract by Westinghouse. The interim assessment agreement, which has allowed progress to continue on the construction site, has been extended through June 22.
About Georgia Power Georgia Power is the largest electric subsidiary of Southern Company (NYSE: SO), America's premier energy company. Value, Reliability, Customer Service and Stewardship are the cornerstones of the company's promise to 2.5 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. Georgia Power focuses on delivering world-class service to its customers every day and the company is consistently recognized by J.D. Power and Associates as an industry leader in customer satisfaction. For more information, visit www.GeorgiaPower.com and connect with the company on Facebook (Facebook.com/GeorgiaPower), Twitter (Twitter.com/GeorgiaPower) and Instagram (Instagram.com/ga_power).
Cautionary Note Regarding Forward-Looking Statements Certain information contained in this communication is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning scheduled payments under the guarantee agreement, satisfaction of conditions to the effectiveness of the service agreement, and other future actions related to Plant Vogtle Units 3 and 4. Georgia Power cautions that there are certain factors that could 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; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Georgia Power's Annual Report on Form 10-K for the year ended December 31, 2016, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the results of Westinghouse's bankruptcy filing and the impact of any inability or other failure of Toshiba to perform its obligations under its guarantee, including any effect on the engineering, procurement and construction agreement for Plant Vogtle Units 3 and 4, the construction of Plant Vogtle Units 3 and 4, and the U.S. Department of Energy loan guarantees; state and federal rate regulations and the impact of pending and future rate cases and negotiations; 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; available sources and costs of fuels; effects of inflation; the ability to control costs and avoid cost overruns during the development construction and operation of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed; the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; advances in technology; legal proceedings and regulatory approvals and actions related to Plant Vogtle Units 3 and 4, including Georgia Public Service Commission approvals and Nuclear Regulatory Commission actions; interest rate fluctuations and financial market conditions and the results of financing efforts; changes in The Southern Company's or Georgia Power's credit ratings, including impacts on interest rates, access to capital markets, and collateral requirements; the impacts of any sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on foreign 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; and the effect of accounting pronouncements issued periodically by standard setting bodies. Georgia Power expressly disclaims any obligation to update any forward-looking information.