What is the main reason for the delay in Plant Vogtle Unit 3's testing?

The delay is due to the identification and ongoing completion of additional construction remediation work, primarily related to electrical commodity installations, necessary to meet quality and design standards before proceeding with hot functional testing.

What is the expected impact on the in-service date and costs?

While the target in-service date remains November 2021, a delay is likely, potentially pushing the date back by one month or more. Each month of delay beyond November 2021 is estimated to add approximately $25 million in capital costs for Georgia Power. Additionally, a monthly reduction in the return on equity for cost recovery will take effect after June 1, 2021, if the unit is not commercially operational.

Are there concerns about the quality of construction at Plant Vogtle?

The company has identified a need for additional construction remediation work to ensure quality and design standards. In response, Southern Nuclear is reviewing its construction quality programs and implementing improvement plans. The NRC also conducts ongoing inspections and reviews throughout the construction process.

What is the outlook for the completion of Plant Vogtle Units 3 and 4?

This 8-K specifically addresses delays related to Unit 3. The report indicates that the schedule for Unit 3 is challenged, and a delay is likely. The long-term outlook and potential impacts on Unit 4 are not detailed in this specific filing, but the inherent risks of constructing nuclear facilities, especially those with new technology, are highlighted in the cautionary statements.

SOUTHERN CO 8-K SEC Disclosure

Summary

Southern Co. (SO) subsidiary Georgia Power Company has announced a delay in the start of hot functional testing for Plant Vogtle Unit 3 into April, attributed to additional construction remediation work primarily concerning electrical installations. While the company is targeting a November 2021 in-service date, a delay is considered likely, potentially adding one month or more to the schedule. Each month of delay beyond November 2021 is estimated to incur approximately $25 million in additional capital costs for Georgia Power. Furthermore, the return on equity used for cost recovery will be reduced by 10 basis points per month after June 1, 2021, if the unit is not yet operational. This news indicates potential cost overruns and extended timelines for the already complex Plant Vogtle project. Investors should monitor the progress of remediation efforts and any further updates on the in-service date and associated costs. The company emphasizes its ongoing commitment to safety and quality, with ongoing reviews of construction quality programs. The ultimate financial and operational impact remains uncertain.

Key Highlights

1Plant Vogtle Unit 3 hot functional testing delayed into April due to additional electrical work.
2Target in-service date of November 2021 is challenged, with a likely delay of one month or more.
3Estimated additional capital costs of $25 million per month for delays beyond November 2021.
4Return on equity for Nuclear Construction Cost Recovery tariff will be reduced by 10 basis points monthly after June 1, 2021, if Unit 3 is not operational.
5Georgia Power is reviewing and improving construction quality programs in response to identified issues.
6Company emphasizes ongoing prioritization of safety and quality in construction and compliance processes.

SOUTHERN CO 8-K Report, Corporate Update (Mar 19, 2021)

Summary

Key Highlights

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