ATLANTA, Feb. 9, 2018 /PRNewswire/ -- Georgia Power today praised members of the U.S. Congress for voting to approve new legislation to extend the deadline for receiving advanced nuclear production tax credits. The approval follows extensive bipartisan efforts by Georgia Senator Johnny Isakson and other members of the Senate Finance Committee on the legislation which, if signed into law, will further reduce risk for continuing construction of Vogtle 3 & 4 while also providing approximately $1 billion in benefits for Georgia Power customers. The Vogtle nuclear expansion is leading the way for new nuclear construction in the United States and, once complete, will generate enough electricity to serve 500,000 homes and businesses.
"We are grateful to Senator Isakson for his leadership on this issue, and to the entire Georgia delegation for recognizing the importance of new nuclear generation and demonstrating renewed federal support for the Vogtle project," said Paul Bowers, chairman, president and CEO of Georgia Power. "At Georgia Power, we are focused on delivering value to our customers every day and we're committed to completing these new units, which will provide millions of Georgians with carbon-free energy and help keep electric rates low for 60 to 80 years into the future."
The Energy Policy Act of 2005 created a credit for production from advanced nuclear power facilities commonly referred to as Production Tax Credits (PTCs). Under this law, the Vogtle project will qualify for the advanced nuclear facility federal income tax credit of 1.8 cents for each kWh of electrical energy produced and sold once the units come online. While PTCs do not impact the in-service cost of the units, they provide benefits to customers through a reduction in revenue requirements beginning when the units go into service and for many years beyond.
Federal support and constructive legislation continue to be an important key to success for Vogtle 3 & 4. Georgia Power recently announced that, due to new federal tax laws, as well as the positive impact of the receipt of the full amount of parent guarantee payments from Toshiba, Georgia electric customers will pay $139 million less than expected for the Plant Vogtle expansion in 2018. Read more here. Additionally, the company holds a conditional commitment from the U.S. Department of Energy (DOE) for approximately $1.67 billion in additional loan guarantees for the Vogtle project. With a total of more than $5 billion in anticipated DOE loan guarantees, the company expects to be able to provide more than $500 million in present-value benefits to its customers.
From the beginning of the Vogtle expansion, Georgia Power has worked to pursue all available benefits for customers and minimize the impact of the new units on electric bills. Today, after including anticipated customer benefits from federal PTCs, interest savings from loan guarantees from the DOE, and the fuel savings of nuclear energy, the projected peak rate impact to Georgia Power retail customers is well below original projections of approximately 12 percent, with 5 percent related to the project already in rates.
Final approval and issuance of the additional loan guarantees by the DOE cannot be assured and are subject to the negotiation of definitive agreements, completion of due diligence by the DOE, receipt of any necessary regulatory approvals, and satisfaction of other conditions.
Vogtle 3 & 4 Move Forward in 2018
Georgia Power received unanimous approval to continue construction of the Vogtle 3 & 4 project from the Georgia Public Service Commission (PSC) in December 2017. The decision followed months of review and evaluation of a unified recommendation conducted by the Vogtle co-owners prompted by the bankruptcy of former primary Vogtle contractor Westinghouse. The decision continues to protect customers with new penalties for delays and cost increases in addition to penalties included in the previous stipulated agreement approved earlier in 2017 by the Georgia PSC. Under this amended structure, shareholders will see a significant impact of approximately $750 million through November 2022. Read more about the decision to complete Vogtle 3 & 4 here.
Construction has continued uninterrupted at the Vogtle site following Westinghouse's bankruptcy in March 2017 with all Vogtle co-owners working together to maintain the project's momentum. Southern Nuclear, the nuclear operating subsidiary which operates the existing units in Georgia, is now the project manager at the site with global construction firm Bechtel managing daily construction efforts. Progress is steady and evident, illustrated by multiple recent achievements such as the placement of the 225,000-pound Unit 3 pressurizer in January and 1,300 cubic yards of concrete placed inside the Unit 4 containment vessel in December.