Southern in Talks on Expanded U.S. Guarantees to Aid VogtleBy , , and
Southern, Oglethorpe may get an increased loan guarantee
Energy Department said to encourage requests for more aid
Developers of a troubled nuclear plant in Georgia are seeking more federal support for the project, potentially increasing a record $8.3 billion loan guarantee it has already been promised, according to the two companies leading the project.
Southern Co. and Oglethorpe Power Corp., which are the lead owners of two new reactors under construction at Plant Vogtle, said they are in talks with the U.S. Energy Department to rework the terms of their guarantee, including increasing government financing.
"We have filed an application to potentially increase the amount of funds available for the Vogtle project under our DOE loan guarantee agreement to keep all options open for customers," Georgia Power spokesman Jacob Hawkins said in an email. Georgia Power, a unit of Southern, is the lead developer of the project with a 46 percent stake.
The growing costs of the project mean the companies could qualify for more federal support, according to people familiar with the discussions. The loan agreements required changes after the bankruptcy of Westinghouse Electric, the lead contractor. The Energy Department has been encouraging the companies to apply, they said. The people asked not to be identified because the talks are ongoing.
“The Department of Energy continues to have daily conversations with our borrowers about the status of Plant Vogtle,” Shaylyn Hynes, a spokeswoman for the department, said in an email.
Energy already committed to back $8.3 billion in loans for the venture, which is the last new nuclear plant under construction in the U.S., after developers stopped work on a separate project in South Carolina. President Donald Trump has proposed killing the loan guarantee program, which provides a government guarantee that loans to the project will be repaid, and Congress may follow suit, and so the additional financing may need to be rushed through to beat any cutoff.
"The federal government needs to get out of the business of lending money to private businesses, period. Vogtle is no exception," said Thomas Pyle, head of the free-market advocacy group American Energy Alliance and the head of Trump’s transition team for the department. "When will enough be enough?"
Oglethorpe said in a filing earlier this month that it estimated the cost to complete the reactors had increased from $5 billion to as much as $7.3 billion. The company has already withdrawn $1.7 billion in federal aid out of $3.1 billion promised.
"We have applied for a potential increase in our DOE loan amount to keep our financing options open while we continue to evaluate the future of Vogtle 3 and 4," Greg Jones, an Oglethorpe spokesman said in an email.
Southern is set to tell regulators in Georgia by month’s end whether it plans to continue with construction plans for the plant. Regulators in the state signaled their support for the project, which is years delayed and billions dollars over budget, voting Tuesday to review a new cost estimate.
Earlier this month Southern said it estimated its portion of the cost to be at least $11.5 billion. Given Southern’s 46 percent stake in the project, that would put the total cost of building the two reactors at $25 billion.
"We need the administration to engage sooner than later," Tim Echols, the vice chairman of the Georgia Public Service Commission and a proponent of the project, said in an email.