Summary
Southern Company's subsidiary, Georgia Power, has received approval from the Georgia Public Service Commission (PSC) regarding the costs associated with Plant Vogtle Units 3 and 4. The PSC approved a settlement that allows Georgia Power to recover a significant portion of the construction and capital costs, specifically $7.562 billion in construction and capital costs and $1.02 billion in associated retail rate base items. This approval resolves key issues concerning the prudence and cost recovery for the remaining construction costs not already included in rates. This decision is expected to result in an annual increase in Georgia Power's retail base revenues of approximately $729 million, leading to an approximate 5% adjustment in average retail base rates. The rate adjustment is contingent upon Unit 4 achieving commercial operation. Importantly, any future increases in project capital costs beyond the approved amounts will not be recoverable through regulated rates and will be charged to income, potentially impacting earnings.
Key Highlights
- 1Georgia PSC approved Georgia Power's application to adjust rates for Plant Vogtle Units 3 & 4 costs.
- 2Georgia Power will recover $7.562 billion in construction/capital costs and $1.02 billion in retail rate base items for Vogtle 3 & 4.
- 3This approval resolves issues regarding reasonableness, prudence, and cost recovery for remaining Vogtle construction costs.
- 4Annual retail base revenues are expected to increase by approximately $729 million.
- 5Average retail base rates will be adjusted by approximately 5% after Unit 4 achieves commercial operation.
- 6Unrecoverable capital cost increases will be charged to income, potentially impacting earnings.
- 7A pre-tax credit of approximately $228 million ($170 million after tax) will be recorded in Q4 2023 due to recovered construction work-in-progress costs.