December 21, 2017 / 4:44 PM / 2 years ago

UPDATE 2-Georgia gives Southern Co go-ahead to finish nuclear power project

(Updates with details, more quotes, statement from governor, background)

By David Beasley

ATLANTA, Dec 21 (Reuters) - The state of Georgia said Southern Co can finish building two nuclear reactors in the state, which when completed will be the first new U.S. nuclear power plant to be built since the 1970s.

The Georgia Public Service Commission (PSC), the state’s utility regulator, unanimously approved a motion for Southern’s Georgia Power Co affiliate to press on with the project, known as Plant Vogtle.

The project has been beset by years of delays and billions of cost overruns, dealing a heavy blow to what was heralded as a resurgence in nuclear power a decade ago.

The Georgia plants are now expected to be online in November 2021 and November 2022, Southern Co said in a statement on Thursday. The company estimated in August that the project will ultimately cost about $19 billion, about $5 billion more than originally expected.

Stan Wise, chairman of the Georgia PSC, said the push for carbon emission reductions and the uncertainty over natural gas prices pushed him to support continuing the project.

“I believe nuclear needs to be part of a diverse fuel mix,” he said.

The delays and cost overruns pushed the main contractor, Westinghouse Electric Co LLC, into bankruptcy in March, throwing the project’s future in doubt.

“The Georgia Public Service Commission has shown leadership in making this complex and difficult decision,” Georgia Power Chief Executive Paul Bowers said.

The Westinghouse bankruptcy resulted in the cancellation of the South Carolina project, known as V.C. Summer. Both projects were approved a decade ago.

The projects ran into trouble when construction - expected to be quicker and safer than previous plants - ended up running into delays due to problems with work quality. Natural gas prices plunged in the interim, dampening enthusiasm for nuclear power.

What kept the Georgia project afloat after V.C. Summer was canceled was the presence of Southern to back the project, along with a $3.68 billion settlement with Toshiba Corp, which owns Westinghouse.

The commission’s decision cuts the amount Georgia Power can collect from ratepayers for the project by $1.7 billion as well.

“I commend the Public Service Commission for its vision and foresight in approving continuation of the Plant Vogtle expansion while holding the owners accountable to ratepayers,” Governor Nathan Deal said in a statement.

Environmental advocates criticized the decision, noting it will be years before it is finished.

“As the last new nuclear power plant standing this should be a lesson: these nuclear facilities cannot be built on time nor on budget,” said Stephen A. Smith, executive director of Southern Alliance for Clean Energy.

Last week, Georgia Power and the project’s co-owners said Toshiba paid all of its remaining $3.23 billion in obligations in a lump sum. It had been scheduled to pay in monthly installments through early 2021. (Reporting By David Beasley in Atlanta; Editing by Susan Thomas)

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