ATLANTA — Georgia Power faces significant challenges keeping construction costs under an approved $6.1 billion budget for what could be the first in a new wave of nuclear power plants, a state-appointed monitor said Friday.
The report by nuclear engineer William Jacobs questions whether the Southern Co. subsidiary can make the first of two new reactors slated for Plant Vogtle near Augusta operational by April 2016 because the construction schedule has already slipped several months. Jacobs was hired by the state to monitor the project and has access to the construction site, key project officials and internal financial information.
His report is a blow for a flagship project that nuclear industry leaders hope will prove they can build new reactors without the constant delays and skyrocketing costs that hampered the last round of construction decades ago. President Barack Obama's administration has approved $8 billion in loan guarantees for the Plant Vogtle expansion in its drive to expand the use of nuclear energy.
"The Company faces significant challenges in maintaining the Project budget forecast at or below the certified amount," Jacobs said in a report that utility regulators released to The Associated Press.
Southern Co. spokesman Todd Terrell said power company was still reviewing the report. He said Georgia Power believes it can speed up work to make up for lost time and has not formally revised its budget or project timelines.
"There's a very strongly held company belief that we can stay on budget and on schedule," Terrell said.
Jacobs warned the state's Public Service Commission, which regulates Georgia Power, that several issues could delay the commercial start of the new reactors past the current estimates of April 2016 and April 2017.
For one, the U.S. Nuclear Regulatory Commission has not certified the latest version of Westinghouse Electric Co.'s AP1000 reactor, which Georgia Power picked to run its new plant.
Until that reactor design is approved, the NRC cannot give a final license to Georgia Power to build the new reactors in rural eastern Georgia. Without that license, Georgia Power cannot start major construction work. Southern Co. CEO Tom Fanning recently told the AP that the company expects a final NRC license for the Plant Vogtle expansion before the end of the year, but Jacobs said a decision could easily slip into 2012.
The state-appointed monitor also said the consortium supplying and building the nuclear plant has repeatedly failed to meet project milestones. Those specific milestones, considered trade secrets, were redacted on the public version of his report.
"Until the Consortium has demonstrated the ability to achieve schedule milestones on schedule, their ability to recover over two months of schedule delay is in doubt," Jacobs said.
He said a growing number of project change orders could run up costs, though he added there is not enough information yet for Georgia Power to revise its forecasts. Jacobs also warned that an assembly facility run by the Baton Rogue, La.-based Shaw Group has not yet proved it can produce high-quality reactor parts. NRC officials plan to examine that facility this summer.
Ray Henry can be reached at http://www.twitter.com/rhenryAP.