A Step Forward for Nuclear, a Win for Customers

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The growth of carbon-free nuclear energy is quickly becoming a reality in Tennessee and Georgia. Just last week month, a new nuclear unit came online on the TVA system, while Georgia Power announced an agreement on construction costs for new nuclear units at Plant Vogtle, an agreement that reduces customer rates during the next four years.

On October 19th, TVA announced that Unit 2 of its Watts Bar nuclear operating station had completed a series of extensive tests and had been reliably operating at full power for more than three weeks. This welcome news means that the first new nuclear generation in the United States in twenty years now stands ready to contribute electricity to the power grid on a full-time basis.

“TVA’s mission is to make life better in the Valley by providing reliable, low-cost energy, protecting our area’s natural resources and working to attract business and growth – all priorities simultaneously supported by the completion of Watts Bar Unit 2,” said Bill Johnson, TVA president and CEO. “Watts Bar Unit 2 is a key part of our commitment to produce cleaner energy without sacrificing the reliability and low cost that draws both industry and residents to our area.”

Watts Bar Unit 2 will now be one of seven nuclear units in the TVA fleet, helping to supply more than a third of the generating capacity that powers the region. The project cost nearly $5 billion and has already generated more than 500 million kilowatt/hours of carbon-free energy for the Valley during its testing.

That’s not the only good news for nuclear and power consumers these days, however. The day after Watts Bar Unit 2 officially graduated into commercial operation, the Georgia Public Service Commission Staff and Georgia Power Company announced the signing of an important agreement related to the construction costs of Plant Vogtle, a nuclear plant in east Georgia that is currently adding two new nuclear units. Under the agreement, customers will see a reduction in rates of about $325 million over the next four years.

Read the Official Release Here

While the full Public Service Commission still has to ratify the agreement, or modify it, the news is a strong development for both customers and the future of the grid in the region. Going forward, Georgia Power’s share of the estimated capital cost of the project would be $5.68 billion, with a $240 million contingency. That puts the new nuclear project on stable footing and helps to ensure that Units 3 and 4 of Vogtle come online as expected, adding another 2,200 megawatts of carbon-free electricity that will be much needed in the future.

For customers, the agreement would be a win, as well. By compromising on a reduced return on equity, Georgia PSC staff and Georgia Power will save customers millions of dollars. The agreement also provides for further reductions on profit for the utility if the nuclear units are not in commercial operation by the end of 2020.

“Current Georgia Power ratepayers have paid $1.8 billion in financing costs for Plant Vogtle thus far,” said Tom Bond, the Commission’s Director of Utilities.  “We felt it was appropriate that these current customers get the lion’s share of any benefits from the settlement and that shareholders should also contribute in a meaningful way,” said Bond.

As we have with other nuclear projects such as TVA’s Watts Bar, PACE fully supports the continued development of Units 3 and 4 at Plant Vogtle. We believe that nuclear power will be an essential part of meeting the region’s power demands in a carbon restrained policy environment. For that reason, we believe that the agreement reached by the Georgia PSC staff and Georgia Power is a positive step forward. If approved by the full commission, it would be a win for the future of nuclear power and a win for Georgia ratepayers who have invested significantly in this much-needed project.