Vogtle federal loan guarantee extended

A federal loan guarantee of USD$8.3 billion to help finance Plant Vogtle’s nuclear expansion may not be completed by the end of June as officials of Southern Co. had anticipated.

Company spokesman Steve Higginbottom said that the conditional commitment has been extended by the Department of Energy until the end of the year and that negotiations on the terms of the loan guarantee are ongoing between the company and DOE to determine the ultimate schedule of closing.

Georgia Power Co., Southern Co.’s subsidiary and nuclear partners MEAG and Oglethorpe Power were conditionally approved to receive up to USD$8.32 billion for the USD$14 billion Vogtle expansion in February of 2010. The sum of the loan guarantee will include USD$3.46 billion for Georgia Power, USD$3.05 billion for Oglethorpe and USD$1.80 billion for MEAG.

Under the loan-agreement program, the government promises to assume a company’s debt if the company defaults. The guarantees were designed to aid energy companies in undertaking the costly endeavour of projects with new nuclear reactors.

The conditional offer has yet to close over two years after its announcement and was to expire 90 days after the Vogtle expansion received its combined operating license in February and an agreement was to be reached during the second quarter of 2012.

The company acknowledged uncertainty about the proposed terms of the agreement and concerns were expressed in testimony before the Georgia Public Service.

It has also come to be that the Vogtle expansion will include additional construction costs of USD$900 million proposed by the contractor consortium Stone & Webster Inc. and Westinghouse. Georgia Power’s share of the added construction costs would be approximately USD$400 million.

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