Georgia Power, the largest electric subsidiary of Southern Company, has entered into a new agreement with Toshiba, the parent company of Vogtle contractor Westinghouse. The agreement, approved by the U.S. Department of Energy, affirms the value of Toshiba's guarantee at $3.68 billion – providing additional protections for Georgia electric customers following Westinghouse's March bankruptcy. Additionally, Georgia Power and Westinghouse have finalized a new service agreement which allows for the transition of project management at the Vogtle expansion from Westinghouse to Southern Nuclear and Georgia Power. The service agreement is subject to approval of the Westinghouse Board of Directors and certain other conditions, including bankruptcy court approval. The project is co-owned by Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities.
"We are pleased with today's positive developments with Toshiba and Westinghouse that allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power," said Paul Bowers, chairman, president and CEO of Georgia Power. "We are continuing to work with the project's Co-owners to complete our full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for our customers."
"We are happy to have Toshiba's cooperation in connection with this agreement which provides a strong foundation for the future of these nuclear power plants," said Thomas A. Fanning, chairman, president and CEO of Southern Company.
In addition to affirming the value of $3.68 billion in parent guarantees from Toshiba, the new agreement also adds clarity on the timing and form of payments for that obligation. Parent guarantees were put in place to protect Georgia electric customers as part of the original contract and the first payment under the new agreement is due from Toshiba in October 2017.
The scope of the service agreement with Westinghouse includes engineering, procurement and licensing support, as well as access to Westinghouse intellectual property needed for the project. The agreement will take effect after approval of the bankruptcy court and rejection of the current engineering, procurement and construction contract by Westinghouse. The interim assessment agreement, which has allowed progress to continue on the construction site, has been extended through June 22.