Skip to content
AnalystLens

SOUTHERN CO 8-K Report, Corporate Update (Feb 1, 2024)

Reports
Other Events
Filing Date
Filed February 1, 2024
Period End
February 1, 2024
In the record · 2016–202610-K1110-Q328-K206

SO filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 206 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jan ’19Jan ’19
  2. Leadership change8-K · Oct ’21Oct ’21
  3. Material agreement8-K · Feb ’26Feb ’26

01—Abstract

Summary

Summary of the 8-K filed February 1, 2024. Cited figures are marked; the original filing is the authoritative source.

This 8-K filing from Southern Company (SO) reports an update on the in-service date for Plant Vogtle Unit 4.

Georgia Power Company has identified and remediated vibrations in the cooling system's piping during start-up and pre-operational testing. This issue is similar to what was encountered with Unit 3. Consequently, the in-service date for Unit 4 is now projected for the second quarter of 2024.

While the total capital cost forecast is not expected to change, a delay beyond the second quarter of 2024 could result in additional capital costs of up to $15 milliona per month. More critically, if commercial operation is not achieved by March 31, 2024, Georgia Power's return on equity for its Nuclear Construction Cost Recovery tariff will be reduced to zero, leading to an estimated negative earnings impact of approximately $30 million per month until commercial operation begins. Investors should monitor the upcoming February 2024 earnings call for further details.

02—Key points

Key Highlights

  1. Plant Vogtle Unit 4 in-service date projected for Q2 2024, a delay from previous expectations.
  2. Vibrations in the cooling system's piping identified and remediated during start-up testing.
  3. Delay beyond Q2 2024 could add up to $15 million per month in capital costs for Georgia Power.
  4. A critical financial penalty: If Unit 4 is not operational by March 31, 2024, Georgia Power's ROE for its Nuclear Construction Cost Recovery tariff will be reduced to zero.
  5. This ROE reduction could result in an estimated negative earnings impact of approximately $30 million per month.
  6. Future challenges may include managing contractors, material availability, operational support, and potential for new issues with the new AP1000 technology during further testing.
  7. Southern Company will provide further updates during its February 2024 earnings call.

03—Questions

Frequently Asked Questions

  1. What caused the delay in Plant Vogtle Unit 4's in-service date?

    The delay is due to vibrations identified and remediated in the piping within the cooling system during start-up and pre-operational testing. This issue is similar to ones previously experienced with Unit 3 and other AP1000 nuclear units.

  2. What are the financial implications of this delay?

    While total capital costs are not expected to increase, delays beyond the second quarter of 2024 could add up to $15 million per month in capital costs. More significantly, if commercial operation isn't achieved by March 31, 2024, Georgia Power's return on equity for its Nuclear Construction Cost Recovery tariff will drop to zero, impacting earnings by an estimated $30 million per month until operation commences.

  3. Are there any other risks associated with the Unit 4 start-up?

    Yes, the company notes potential challenges in managing contractors and vendors, availability of materials and parts, cost escalation, and securing adequate support resources. As Unit 4 utilizes new technology, new challenges may continue to arise during further testing and start-up, which could lead to additional schedule delays and cost increases.

  4. When will investors receive more information about these developments?

    Southern Company has stated that further updates will be provided in connection with its earnings call scheduled for February 2024.

04—Continue

← View all 8-K filings