Toshiba Fulfills $3.68B Parent Guarantee Obligation for Vogtle Nuclear Expansion
Friday, December 15th, 2017
Georgia Power and the other Vogtle co-owners, Oglethorpe Power, MEAG Power and Dalton Utilities, have now received a total of $3.68 billion in parent guarantee payments from Toshiba, the full amount owed by the parent company of former primary Vogtle contractor Westinghouse. Toshiba originally agreed to make monthly payments through January 2021 but, under a new agreement reached earlier this month, delivered all remaining installments in a single payment of approximately $3.225 billion on December 14. Georgia Power's proportionate share of the payment is $1.47 billion.
Parent guarantees were put in place to protect Georgia electric customers as part of the original contract for the Vogtle nuclear expansion. The payments will reduce the total cost of the plant for Georgia Power by approximately $1.7 billion with every dollar received from Toshiba being used to benefit 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. In addition to receiving 100 percent of parent guarantee funds available from Toshiba, the company recently announced a conditional commitment of approximately $1.67 billion in additional loan guarantees for the project from the U.S. Department of Energy. After including anticipated customer benefits from federal production tax credits, 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 approximately 10 percent, with 5 percent related to the project already in rates – well below original projections of approximately 12 percent.
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.