Will Toshiba Cooperate with SO to Finish Vogtle Plant?
Uncertainty at Vogtle power plant
Southern Company (SO), one of the largest regulated utilities in the sector (XLU), has asked Toshiba for the $3.7 billion it owes the company to complete the construction of the Vogtle nuclear power plant. According to an interview with the Wall Street Journal, Thomas Fanning, Southern Company’s chair and CEO, said that the utility is working with Toshiba to get the $3.7 billion that Toshiba owes the company. However, even if Toshiba honors this commitment, Southern Company isn’t certain the plant will be completed.
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Cost overruns and delays continue at Vogtle
Toshiba is a parent company of the now-bankrupt Westinghouse Electric, the principal contractor of Southern Company’s Vogtle nuclear power plant in Georgia. Westinghouse is also a principal contractor of SCANA’s (SCG) VC Sumner nuclear power plant.
Southern Company’s Thomas Fanning believes the company will reach an agreement with Toshiba in the next few weeks. However, Toshiba is planning to exit the overseas nuclear construction segment. The construction of the Vogtle nuclear power plant is three years behind schedule, and cost overruns have exceeded the original budget by $1.3 billion.
Kemper plant delays
Southern Company’s Kemper County power plant is another headache for Southern Company and its investors. On May 1, 2017, the utility reported yet another delay and more cost overruns.
This latest delay will likely cost Southern Company an additional $38 million, which would take the total plant’s cost beyond $7.3 billion. SO started to construct the plant in 2010 with a cost estimate of $3 billion.