Summary
Southern Co (SO) filed an 8-K on August 30, 2023, detailing Georgia Power's Application to the Georgia Public Service Commission (PSC) to adjust rates for the full costs of Plant Vogtle Units 3 and 4. Georgia Power seeks to recover $8.826 billion in total construction and capital costs, plus associated retail rate base items and operating costs. Crucially, a stipulated agreement has been filed by Georgia Power and several intervenors, proposing a recovery of $7.562 billion in construction and capital costs and $1.02 billion in retail rate base items, contingent upon Georgia PSC approval. This stipulation represents a significant development, as it aims to resolve outstanding issues regarding cost recovery, including extended construction times and rework. If approved, the stipulation would lead to an approximate 5% increase in annual retail base revenues and a similar adjustment in average retail base rates upon Unit 4 achieving commercial operation. However, the filing also highlights potential penalties, including a zero return on equity for the Nuclear Construction Cost Recovery (NCCR) tariff if Unit 4 commercial operation is delayed past March 31, 2024. Additionally, Georgia Power faces a potential pre-tax charge of up to $345 million related to cost-sharing disputes with co-owners of the project.
Key Highlights
- 1Georgia Power filed an application with the Georgia PSC to recover $8.826 billion in total construction and capital costs for Plant Vogtle Units 3 & 4.
- 2A stipulated agreement has been filed with the Georgia PSC by Georgia Power and intervenors, proposing a recovery of $7.562 billion in construction/capital costs and $1.02 billion in retail rate base items.
- 3If the stipulation is approved, Georgia Power expects an approximate 5% increase in annual retail base revenues and average retail base rates upon Unit 4 achieving commercial operation.
- 4A condition in the stipulation mandates a zero return on equity for the NCCR tariff if Unit 4 commercial operation is not achieved by March 31, 2024.
- 5Georgia Power may incur pre-tax charges of up to approximately $345 million due to a dispute with co-owners over cost-sharing and tender provisions.
- 6The Georgia PSC has approved expenditures up to a revised $7.3 billion through the Vogtle Construction Monitoring (VCM) process, with expenditures above this amount through December 31, 2022, having been reviewed but not yet verified or approved.
- 7The filing triggered a required vote by joint owners on continuing construction, which Georgia Power has supported.