Southern Co. (NYSE: SO) CFO Art Beattie won’t rule out the possibility that the Atlanta-based company might one day look to acquire new nuclear units if they come on the market and also said negotiations continue with the U.S. Department of Energy (DOE) over terms of a federal loan agreement for the Vogtle 3 and 4 units in Georgia.
At the conclusion of Beattie’s presentation at a Deutsche Bank conference May 15, the Southern CFO was asked if Southern would ever have any interest in the Comanche Peak nuclear plant in Texas if it should go on the market. The plant is run by Luminant, an Energy Future Holdings (EFH) affiliate, which has not expressed any public interest in selling.
“All I would really say is I think we have a fiduciary responsibility to look at everything,” Beattie, said, adding that he would not directly comment on any particular industry assets.
When contacted by GenerationHub, a Luminant spokesperson moved to snuff out any sale talk. “First I can tell you that Comanche Peak is not for sale. Second, Luminant and Mitsubishi remain committed to continuing to work closely with the NRC as we pursue the combined construction and operating license for additional nuclear power for Texas,” the spokesperson added.
But most of Beatty’s presentation and the subsequent questions dealt with Southern subsidiary Georgia Power and its partners on their effort to develop two new 1,100-MW reactors at the Vogtle station. Earlier this year, the group won the first new nuclear plant licenses issued by the NRC in more than 30 years.
Beattie said efforts to finalize a federal loan for the project have grown more complex since the high-profile failure of the Solyndra solar project, which had benefitted from a government loan guarantee. There is much discussion now on the “corporate financing” versus “project financing” approach for the project, Beattie said.
The CFO also noted that project vendors are seeking to increase Southern’s expenses for it almost 46% share of the units by $400m. Currently, Southern’s expected contribution to the project would be $6.1bn, Beattie said.
The vendors, Shaw Group (NYSE: SHAW) and Westinghouse Electric, say project expenses are being increased by issues such as design changes and schedule delays. Talks are ongoing with the vendors, Beattie said. The CFO said many issues inevitably arise when dealing with such a large, complex infrastructure project.
Beattie said positive developments like low interest rates, the construction work in progress (CWIP) formula and production tax credits make Vogtle 3 and 4 look even more attractive than they did a few years ago.
The CFO also vouched for the financial stability of its partners in the Vogtle expansion – Oglethorpe Power, the Municipal Electric Authority of Georgia (MEAG) and the city of Dalton, Ga.
Beattie also said that rapid progress is being made on the Ratcliffe coal gasification power plant that Southern’s Mississippi Power is developing in Kemper County, Miss. The CFO also noted that the Mississippi commission recently reaffirmed the certificate for the plant, although the Sierra Club might pursue additional legal appeals.