Southern Co. is nearing an agreement with Oglethorpe Power Corp. and two other companies to continue working on the only nuclear power plant under construction in the U.S., according to people familiar with the matter.
Southern and its partners are trying to agree on provisions that would limit the potential impact of further cost increases for the troubled $28 billion Vogtle plant in Georgia, said the people, who asked not to be identified because the matter isn’t public. The deadline for a decision has been pushed back to 5 p.m. New York time Wednesday, said Terri Statham, an Oglethorpe spokesperson.
Oglethorpe said on Sept. 24 that it would only continue on the project — which has doubled in price and is running more than five years behind schedule — if future costs were capped. Southern initially rejected that demand but agreed to extend the talks.
Southern previously said construction couldn’t proceed without Oglethorpe, which owns 30 percent of the project. The companies declined to comment on the details of the talks. A deal could be announced Wednesday after the companies’ boards vote to approve, the people said.
Southern and its partners are the only companies left building reactors in the U.S., and the Vogtle project had been seen as critical to the U.S. nuclear industry’s future. Existing reactors are struggling to compete with cheap natural gas and renewable energy, and efforts to build new ones have all but dried up. Cost overruns forced Scana Corp. to abandon the half-built V.C. Summer project in South Carolina last year.
The Municipal Electric Authority of Georgia and Dalton Utilities, the other minority partners, had already agreed to go forward. Oglethorpe initially had a deadline of Monday, when the company offered to move forward with the project if measures were enacted to control costs.
Southern assumed responsibility for managing its construction of the project near Augusta, Georgia, after contractor Westinghouse Electric Co. went bankrupt last year.
Costs have ballooned from an initial budget of about $14.1 billion. Southern owns 46 percent of the project, and the Municipal Electric Authority of Georgia has a 23 percent share. Dalton Utilities owns 1.6 percent.
Last week, the U.S. Energy Department warned Southern’s partners against pulling out of the project, saying it would prompt the government to demand repayment of about $5.6 billion in federal loans. The agency said in a letter that the new plant is a “linchpin in the all-of-the-above energy strategy required to sustain our nation’s economic strength and energy independence.”
Pressure has also been building to abandon the reactors. A Florida utility is suing to get out of a contract to buy electricity from the plant. Georgia lawmakers, meanwhile, called last week for a price cap on the project.