Toshiba has paid Georgia Power and its partners in Plant Vogtle the remaining $3.2 billion of the parent guarantee it had promised, following the bankruptcy by Westinghouse Electric Company early this year.
A statement by Georgia Power said the company honored its parent guarantee Thursday morning.
In June, Vogtle owners and Toshiba entered a settlement agreement in which Toshiba acknowledged its parental obligation towards Pittsburg-based Westinghouse, in the amount of $3.68 billion. The Toshiba guarantee was aimed at protecting Vogtle owners and rate payers from cost overruns by Westinghouse.
Georgia Power will receive $1.47 billion out of the current payment. According to the statement, the payment will reduce the total cost of the plant for Georgia Power by $1.7 billion.
The Tokyo-based electronics giant made it’s first payment of $300 million in October and had agreed to make payments in installments through January, 2021 but an agreement was reached between Georgia Power and Toshiba last week to speed up the payments to December 15.
Westinghouse, the project lead contractor since inception in 2009, filed Chapter 11 bankruptcy in March, citing project losses linked to Plant Vogtle and the VC Summer plant in South Carolina. Construction of the VC Summer plant, also managed by Westinghouse, was shut down at the end of July owing to cost overruns, project delays, Westinghouse’s bankruptcy and the falling demand for natural gas.
In a statement, Toshiba said the payment would give the company the “right to pursue claims against Westinghouse for the amount paid to Vogtle owners.” Toshiba acquired Westinghouse in 2006.
The payment comes as regulators at the Georgia Public Commission prepare to vote on the fate of Vogtle 3 and 4 next week. The decision was initially set for February, but in correspondences last week between Georgia Power CEO Paul Bowers and PSC chair Stan wise, Bowers called for a decision on Vogtle by the end of the year, to allow the company to take advantage of the current corporate tax rate before it expires. Recent tax reforms in Congress will lower the corporate tax rate from 35% to 20%.
Construction at Vogtle has been marred by cost overruns and delays that threaten the viability of the project. According to new estimates by Georgia Power, the two reactors which were supposed to be operational this year will be complete by 2022.
Plant Vogtle is the only new nuclear power plant to be built from scratch in the USA in 30 years.