Fate of Plant Vogtle could be decided by the end of next week

The fate of Georgia’s nuclear power plant Vogtle could be known as early as Dec. 21 when the Public Service Commission decides whether to allow construction or suspend it.

The decision to change the date follows letter exchanges last week between Georgia Power CEO Paul Bowers and Georgia Public Service Commission chair Stan Wise, in the wake of proposed tax reforms in Congress.

VIDEO: Previous coverage on this issue

The proposed changes would reduce the corporate tax rates from 35% to 20%. Tax benefits from the current tax rate are higher than the proposed rate.

Georgia Power hoped a quicker decision by the commission would allow the company to utilize the benefits of the current tax rate before they expire.

The commission had initially set the decision for February 28th.

The announcement was made at the beginning of hearings in which staff appointed by the commission to monitor progress of Vogtle presented the scope of their findings to commissioners.

The analysts told commissioners they were not calling for the cancelation of the project, but made recommendations to modify some of the proposed conditions set by Georgia Power. The staff recommended the commission only approve $44 million of the $542 million Georgia Power had asked.Staff said the remaining $498 million covering liens and other costs owed to Westinghouse should not be passed on to ratepayers.

Based on their conclusions, staff maintained Georgia power had not actively managed the project well, resulting in repeated schedule delays and increases in costs. They blamed the “licensee of the project,” Southern Nuclear company for the flaws, as they failed to properly manage the project.

Giving his testimony, independent monitor William Jacobs said Westinghouse Electric Company, which was lead contractor from project inception was rarely held accountable.

If the company had properly managed the contractor, the problems surfacing now would have been dealt with years ago, staff said.

In March, Westinghouse filed for bankruptcy citing losses from Vogtle and South Carolina’s V.C Summer project. A change of the projects lead contractor from Westinghouse Electric Company to Southern Nuclear and construction management from Fluor Corporation to Bechtel this year has resulted in progress at the plant, the analysts said.

But without a realistic schedule, the fate of Vogtle has been riddled with uncertainty placing the project in “significant risk, which the company is not willing to accept for itself,” analysts said in their written testimony.

According to the testimony, staff had since 2012 pointed to the lack of a detailed project schedule. Staff told commissioners Monday that a schedule was completed last month, but they had not seen a copy of it. Jacobs said the copy would be released to on the 20th, a day before the commission decides on Vogtle.

The staff said Westinghouse failed to provide complete schedules prior to construction. According to the latest testimony, project design is still not complete.

Lead analysts Stephen Roetger said he was not sure the design would be complete until the project was done. He pointed out that their concern was the quality of the design which could look good on paper, but difficult to implement.

According to their written testimony, Vogtle has had 12,296 design changes since inception. Staffers said some changes were necessary, but others resulted from “[un]constructible or otherwise deficient” original designs.

The analysts told commissioners they were not aware of the decision by Toshiba to pay off the rest of the $3.7 billion of their parent guarantee while preparing their report. Roetger, however told commissioners the decision reached at last week had no impact on their testimony.

With Toshiba agreeing to a speedy payoff of the parent guarantee last week, the Tokyo based electronics giant is absolved from liability in case the reactors don’t function as expected. Westinghouse’s bankruptcy in March led to the cancellation of the Engineering, Procurement and Construction agreement, which protected ratepayers from risks associated with cost overruns. The risks now transferred to Georgia Power could ultimately become the ratepayer’s problem. The analysts, in their testimony, called on commissioners to consider that risk.

Testimony resumes Tuesday.

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