Southern Company subsidiary Georgia Power has formally accepted the terms of a US federal loan guarantee for the construction of its proposed two-unit Vogtle plant. The company was the first to be awarded a conditional loan guarantee in February 2010 and accepted the terms on 21 June, after 120 days of deliberation.

Total guaranteed borrowings would not exceed 70% of the company’s eligible projected costs, or approximately $3.4 billion. Funding is expected to be from the Federal Financing Bank. Any borrowings would be secured against the company’s 45.7% share in the two new units.

Final approval and issuance of the loan guarantees are subject to receipt of the Combined Operating License from the U.S. Nuclear Regulatory Commission (NRC), completion of final agreements, the receipt of any other required regulatory approvals and satisfaction of other conditions.

The company has already received an early site permit and limited work authorization from the NRC for the two additional units in 2009, and site work has begun.

Ownership of the reactors is split among Georgia Power, Oglethorpe Power Corporation (30%), the Municipal Electric Authority of Georgia (22.7%) and Dalton Utilities (1.6%). Georgia Power’s share of the project cost is currently projected at approximately $6.1 billion, which includes approximately $1.7 billion of financing costs to be collected during construction.

The DOE loan guarantees are expected to save Georgia Power’s customers millions in interest costs annually over the expected life of any guaranteed borrowings. “This will provide Georgia Power customers significant savings,” said Georgia Power President and CEO Mike Garrett.

Units 3 and 4 are expected to begin commercial operation in 2016 and 2017, respectively. Southern Nuclear, a subsidiary of Southern Company, will oversee the construction and operate the two new units for Georgia Power and the other owners. Southern Nuclear currently operates two existing nuclear power units at Vogtle as well as Georgia Power’s Hatch nuclear facility near Baxley, Georgia., and Alabama Power’s Farley nuclear facility.

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