Toshiba has agreed to speed up its payments of $3.2 billion to Georgia Power and its partner companies.
A statement from Georgia Power said according to the new agreement, Toshiba would clear the amount by Dec. 15 instead of 2021 as agreed upon earlier.
Georgia Power, in a statement said the new agreement would be binding once approved by the U.S. Department of Energy and board members of the Tokyo-based electronics giant.
Out of the promised amount, Georgia power will receive about $1.4 billion. Since October, Toshiba, the parent company of Westinghouse Electric Co., has paid $455 million to Vogtle owners.
The Toshiba guarantee, is aimed at protecting Vogtle owners and ratepayers from cost overruns by Westinghouse. Cost overruns and construction delays threaten the viability of the project.
Georgia Power CEO Paul Bowers said the new agreement was in line with the company’s commitment to making “the right decisions for our state’s energy future.” Bowers said completion of the project presents the best economic choice for customers.
According to Georgia Power reports released in June, “the Guarantee Obligations exist regardless of whether Plant Vogtle Units 3 and 4 are completed.”
The agreement comes in the heels of recent testimony by analysts appointed by the Georgia Public Service Commission, which showed Georgia Power had poorly managed the project. The analysts called on commissioners to cancel the project as it had proved uneconomical.
According to the testimony, the project has generated losses of about $1.6 billion.
The analysts asked commissioners to disallow new cost estimates by Georgia Power, instead calling on them to set the Total Project Cost at $8.3 billion. Georgia Power estimates presented during the November PSC hearings stand at $12.2 billion.
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. VC Summer was shut down at the end of July owing to cost overruns, project delays, Westinghouse’s bankruptcy and the falling demand for natural gas.
Southern Nuclear, a subsidiary of Southern Company which also owns Georgia Power, took over from Westinghouse as lead contractor at Vogtle in June.
In November, CEOs of companies owning plant Vogtle appeared before commissioners, appealing on them to approve completion of the two units at Vogtle. Construction at the site has been marred by cost overruns and delays.
Commissioners will decide in February whether to approve Georgia Power’s new cost and schedule estimates.
Westinghouse was the project’s lead contractor since inception in 2009. The Pittsburgh-based company filed Chapter 11 bankruptcy protection in March, citing losses linked to construction at Plant Vogtle and the VC Summer project, which was shut down at the end of July owing to cost overruns, project delays, Westinghouse’s bankruptcy and falling demand for natural gas.
Toshiba made it’s first $300 million payment in October, with Georgia Power receiving $137 million of the amount. The company had promised to pay a total of $3.68 billion in parent guarantees as part of added protections to project owners and ratepayers from some potential project risks.
In January, Toshiba announced it was backing away from its nuclear power plant business following losses at the Georgia and South Carolina plants. Toshiba acquired Westinghouse in 2006.
Plant Vogtle is the first nuclear plant in the USA to be built from scratch in 30 years.