Summary
This 8-K filing from Southern Company (SO) addresses significant developments concerning the ongoing construction of Plant Vogtle Units 3 and 4, particularly in the wake of Westinghouse Electric Company's bankruptcy. The company is providing updates on new contractual arrangements aimed at ensuring project completion. Investors should note the shift in project management and the new primary contractor. The key takeaway is the execution of a Construction Completion Agreement with Bechtel Power Corporation, which will take over as the primary contractor for remaining construction activities, effective October 23, 2017. Westinghouse will continue to provide design and engineering services under a separate agreement. This move is a crucial step to mitigate risks and maintain progress on the nuclear expansion project following Westinghouse's prior rejection of its original agreement and filing for bankruptcy protection.
Key Highlights
- 1Southern Company, through Georgia Power, has entered into a Construction Completion Agreement with Bechtel Power Corporation for Plant Vogtle Units 3 and 4.
- 2Bechtel will serve as the primary contractor for the remaining construction activities, effective October 23, 2017.
- 3Westinghouse Electric Company will continue to be responsible for facility design and engineering under a separate Services Agreement.
- 4The Construction Agreement with Bechtel is a cost-reimbursable plus fee arrangement, with an at-risk fee tied to performance against cost and schedule targets.
- 5Each Vogtle Owner is severally liable for their proportionate share of costs owed to Bechtel.
- 6The U.S. Department of Energy (DOE) must approve the new Construction Agreement before any further advances under the existing Loan Guarantee Agreement.
- 7The filing reaffirms Georgia Power's previous recommendation to continue construction of Plant Vogtle Units 3 and 4, with Southern Nuclear Operating Company as project manager.