What is the main purpose of this 8-K filing?

This filing announces the execution of a significant Engineering, Procurement, and Construction (EPC) agreement by Southern Company's subsidiary, Georgia Power, and its partners, for the construction of two new AP1000 nuclear units (Vogtle 3 and 4) at Plant Vogtle. It also details the progress in regulatory applications and the financial implications.

What are the key risks and contingencies associated with this project?

The project is subject to critical regulatory approvals, including certification by the Georgia Public Service Commission and licensing by the Nuclear Regulatory Commission. The agreement also includes provisions for liquidated damages, performance bonuses, and termination clauses for both parties, alongside potential credit enhancement requirements for owners and guarantees from Toshiba and The Shaw Group.

What is the expected timeline and cost impact for Southern Company?

If approved and selected, Vogtle Units 3 and 4 are tentatively scheduled to be placed in service in 2016 and 2017. The filing revises Southern Company's total construction program to $4.4 billion in 2008, $5.2 billion in 2009, and $4.8 billion in 2010, reflecting the substantial capital investment required.

Who are the main parties involved in the construction agreement?

The agreement is between Georgia Power (acting as agent for the owners) and a consortium of Westinghouse Electric Company LLC and Stone & Webster, Inc. The owners of Plant Vogtle include Georgia Power, Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia.

SOUTHERN CO 8-K SEC Disclosure

Summary

Southern Company (SO) filed an 8-K on April 14, 2008, detailing a significant development regarding the expansion of its Plant Vogtle. The company, through its subsidiary Georgia Power, along with other owners, has entered into an engineering, procurement, and construction (EPC) agreement with a consortium of Westinghouse Electric Company and Stone & Webster. This agreement is for the design, construction, and testing of two new AP1000 nuclear units, Vogtle 3 and 4, each with an approximate generating capacity of 1,100 megawatts. This filing represents a crucial step towards securing new baseload generation capacity. The project is subject to several regulatory approvals, including certification by the Georgia Public Service Commission (PSC) and licensing by the Nuclear Regulatory Commission (NRC). If approved and selected as Georgia Power's preferred resource, the new units are tentatively scheduled for commercial operation in 2016 and 2017. The total projected construction program for Southern Company has been revised, with significant capital expenditures anticipated in the coming years, underscoring the substantial financial commitment involved in this expansion.

Key Highlights

1Southern Company, via Georgia Power, has signed an EPC agreement with Westinghouse and Stone & Webster for two new 1,100 MW AP1000 nuclear units at Plant Vogtle.
2The company has filed an application for a combined construction and operating license (COL) with the NRC for these new units.
3The project is contingent on Georgia PSC certification, with Georgia Power expected to submit the agreement for review in May 2008.
4Final ownership percentages among the owners must be finalized by July 1, 2008.
5The agreement includes provisions for liquidated damages for schedule delays and performance failures, as well as bonuses for early completion, subject to a cap on the consortium's liability.
6Guarantees for the consortium's obligations are provided by Toshiba Corporation and The Shaw Group.
7Revised capital expenditure forecasts indicate substantial investments in Southern Company's construction program for 2008-2010, including this nuclear expansion.

SOUTHERN CO 8-K Report, Corporate Update (Apr 14, 2008)

Summary

Key Highlights

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