Summary
This 8-K filing from Southern Company (SO) on January 29, 2015, primarily addresses significant delays and potential cost implications related to the construction of Plant Vogtle Units 3 and 4. Georgia Power, a subsidiary, has been notified by its contractor of an estimated 18-month delay, pushing the projected in-service dates to the second quarter of 2019 for Unit 3 and the second quarter of 2020 for Unit 4. Georgia Power disputes the contractor's forecast and asserts that the contractor is responsible for delay-related costs and that Georgia Power is entitled to liquidated damages. The company also highlights ongoing owner-related costs, estimated at approximately $10 million per month, and significant monthly financing costs of about $30 million due to the extended construction timeline. The filing acknowledges potential further risks including contractor disputes, challenges in construction, permit delays, and the possibility of additional claims, all of which could impact the project's schedule and cost. The ultimate financial outcome of these matters remains uncertain.
Key Highlights
- 1Plant Vogtle Units 3 and 4 face an estimated 18-month delay, pushing in-service dates to Q2 2019 (Unit 3) and Q2 2020 (Unit 4).
- 2Georgia Power disputes the contractor's revised forecast and claims contractor responsibility for delay costs.
- 3Georgia Power believes it is entitled to recover liquidated damages from the contractor for delays beyond guaranteed completion dates.
- 4Owner-related costs are estimated at an additional $10 million per month due to the extended schedule.
- 5Financing costs are estimated at approximately $30 million per month during the extended construction period.
- 6The filing acknowledges ongoing risks of further schedule and cost impacts due to contractor performance, permit issues, and potential future disputes or litigation.
- 7The ultimate outcome of the delays, cost impacts, and disputes is currently uncertain.