Toshiba signs agreement with Georgia Power

12 June 2017

US Georgia Power, the largest electric subsidiary of Southern Company, on 9 June entered into a new agreement with Japan’s Toshiba, the parent company of Westinghouse which is building two AP1000 reactors at its Vogtle NPP. The agreement, approved by the Department of Energy (DOE) affirms the value of Toshiba's guarantee at $3.68bn, which provides additional protection for Georgia electric customers following Westinghouse's bankruptcy.  

Georgia Power and Westinghouse have also reached a new service agreement for the transition of project management at Vogtle from Westinghouse to Southern Nuclear and Georgia Power. This agreement is subject to approval by the Westinghouse Board of Directors and other conditions, including bankruptcy court approval.

The scope of the service agreement with Westinghouse includes engineering, procurement and licensing support, as well as access to Westinghouse intellectual property needed for the project. The deal will take effect after approval of the bankruptcy court and rejection of the existing engineering, procurement and construction contract by Westinghouse.

“We are pleased with today’s positive developments with Toshiba and Westinghouse that allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power,” Paul Bowers, chairman, president and CEO of Georgia Power, said in a statement. In May, Georgia Power agreed in principle to begin taking over the plant where two AP1000 reactors are being installed. Similar reactors are being installed at Scana Corporation’s Virgil C Summer NPP in South Carolina.  “We are continuing to work with the project’s co-owners to complete our full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for our customers," Bowers added.

The deal comes after numerous liens were filed against the VC Summer and Vogtle nuclear facilities. On 9 June CB&I Laurens and CB&I Services, filed a flotilla of liens relating to unpaid bills from work at both plants. Individual liens range from $91,930 to more than $20.5m, and total nearly $57.63m, according to court documents.

As well as affirming the $3.68bn in parent guarantees from Toshiba, the agreement also clarifies the timing and form of payments for that obligation. According to Southern Company, the first payment under the new agreement is due from Toshiba in October 2017. An interim assessment agreement has been extended until 22 June, during which Georgia Power and co-owners of Vogtle will continue to pay the bills. A similar interim assessment agreement for VC Summer ends on 26 June.



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