DOE again pushes loan-guarantee deadline for Southern

The Energy Department again has extended the deadline to finish negotiating with Southern Co. the terms of $8.3 billion in loan guarantees to help finance two nuclear reactors in Georgia.

The deadline, set for today, has been extended until the end of February, said Southern spokesman Tim Leljedal.

The extension comes a day after Southern CEO Tom Fanning told investors that its largest utility, Georgia Power, "has delivered its documents to the DOE."

Fanning said, however, "There remains a series of steps that need to be taken prior to closing."

DOE awarded the conditional loan guarantees to expand Plant Vogtle in southeast Georgia in 2010 as a way to kick-start nuclear development in the United States after the industry lay dormant for new reactors for nearly three decades. Southern's Georgia Power is building the reactors with a group of municipal and cooperative utilities and owns 45.7 percent of the project, representing $6.1 billion.

Negotiations on loan terms got bogged down after solar panel maker Solyndra -- another recipient of federal loan guarantees -- filed for bankruptcy. The protracted talks created an opening for consumer and environmental groups such as the Southern Alliance for Clean Energy to call for DOE to withdraw the offer.

SACE has filed several Freedom of Information Act requests with DOE to learn more about the terms of the loan guarantees and argues that taxpayers are taking on too much risk for the $14 billion project.

It is "unnecessary to commit the taxpayer to a project with a troubled past and continued inherent risks," SACE and eight other consumer and nuclear activist groups wrote in a letter sent to DOE this week.

Fanning told analysts the loan guarantees represent about $200 million in value to Georgia Power customers, who have been paying for the project since 2011 with a fee in their monthly bills.

Paul Patterson, an analyst with Glenrock Associates, said ratepayers are the ones who benefit if the deal is finalized.

"It really is a way for lowering the costs for ratepayers, as opposed to shareholder benefit," he said. "It's a very large project, and they [Southern] have to execute it. Obviously, it's being watched."

Status report looms

February is a big month for Vogtle. Georgia utility regulators will get the latest status report on the project's cost and schedule, which it must review and approve.

The last report, filed a year ago, said regulatory and pre-construction delays increased Georgia Power's share of the project by $737 million. The schedule also had slipped by 19 months.

Fanning told investors that Georgia utility regulators have signed off on all the project's costs, which total $2.2 billion so far. The Public Service Commission can re-examine previously approved spending if there is a budget increase, as part of a 2011 agreement struck with the utility and the PSC staff.

That has not happened at this point.

The reactors are scheduled to start producing electricity in 2017 and 2018. Heavy construction in 2014 will include work on the cooling tower and the 6-foot-thick walls for the nuclear island -- where the reactor sits -- for Unit 3, Fanning said.