Saying they’ve had to address several construction issues newly uncovered during testing, the leaders of Southern Co. have pushed back their in-service target dates for Units 3 and 4 of the Vogtle nuclear power plant in Georgia for the second time this year.
Speaking to analysts after Atlanta-based Southern reported fourth-quarter results, Chairman, President and CEO Tom Fanning said recent testing on Vogtle’s Unit 3 revealed two problems on top of the vibrations discovered last month. One, Fanning said, involved a valve with two drips per minute that was repaired this week. The other centered on the flow through some reactor coolant pumps and Southern teams are still digging into the cause. Fanning said it could be a physical defect but it could also be a case that the pumps’ flow is actually good but that they need be recalibrated.
Given the repair work done and still ahead, Fanning and his lieutenants are now circling May or June (versus April) as the window for Unit 3 to be put into service. And, taking care to double-check the corresponding parts at Unit 4, they are now widening their target window to put that facility into service to late this year through March 2024 from December.
“We will continue to take the time needed to get it right,” Fanning said of the long-delayed project that is on track to cost Southern $10.6 billion.
That time will cost Southern $15 million per month, a figure executives outlined last month when they passed on word of the first set of vibrations. Between the delays and the cost of associated testing and other work, Southern subsidiary Georgia Power’s share of the costs of the Vogtle complex have risen $201 million from the company’s last estimate. The company will take an after-tax charge of $150 million to cover those changes.
For the fourth quarter of 2022, Southern reported a net loss of $87 million, an improvement from the $215 million loss of late 2021, on total revenues that, powered primarily by rising fuel costs, 22% year over year to $7.0 billion. On an operating level, the company produced a profit of $138 million, reversing a prior-year loss of $331 million.
Among the company’s units, Alabama Power stood out positively, nearly doubling its pre-tax profits to $114 million. Across Southern’s footprint, commercial sales rose 2.0% on a weather-adjusted basis while industrial sales slipped 1.6%. Fanning said his team saw demand fade late last year and noted that the closure of one factory also contributed to that drop. But, based on the strong economic development pipeline across the Southeast, he expressed optimism that any recession that might materialize this year or next will relatively quickly make way for renewed demand growth.
Shares of Southern (Ticker: SO) gave up 1.4% after the Feb. 16 report, in line with the broader market, to close at $65.85. Over the past six months, they’ve fallen about 15%, trimming the company’s market capitalization to $72 billion.
