July 30, 2020 / 2:27 PM / 14 days ago

Southern records coronavirus charge at Georgia Vogtle nuclear plant

July 30 (Reuters) - Southern Co said on Thursday it recorded a $149 million pretax charge to income in the second quarter due to possible coronavirus-related increases in the cost of building two long-delayed reactors at its Vogtle nuclear plant in Georgia.

Despite possible cost increases, Southern said it still plans to complete the reactors by their regulatory-approved November 2021 and November 2022 in-service dates.

In April, Southern's Georgia Power unit reduced the workforce at the Vogtle construction site by about 20% as absenteeism from the coronavirus increased.

Southern said the number of cases at the site declined significantly in May and early June but began increasing again in mid-June and "continues to impact productivity levels and the pace of activity completion."

Georgia Power estimated its share of costs related to COVID-19 mitigation actions and impacts on construction productivity at between $70 million and $115 million.

When Georgia utility regulators approved the Vogtle expansion in 2009, the two 1,117-megawatt Westinghouse AP1000 reactors (Units 3 and 4) were expected to cost about $14 billion and enter service in 2016 and 2017.

But analysts estimate costs have ballooned to more than $25 billion due to delays related to the nuclear accident at Japan's Fukushima plant in 2011 and the 2017 bankruptcy of Westinghouse, the project's former lead contractor.

Energy analysts at Mizuho said Southern's share of Vogtle construction costs will likely be about $1.1 billion over the $7.3 billion deemed reasonable by Georgia regulators. The analysts also estimated Vogtle 4 will not enter service until June 2023.

Georgia Power owns 45.7% of the Vogtle expansion and forecast its part of the total capital cost at around $8.5 billion. The company has also estimated its construction financing costs at around $3.0 billion.

The project's other co-owners include Oglethorpe Power Corp, Municipal Electric Authority of Georgia (MEAG Power) and Dalton Utilities.

Reporting by Scott DiSavino; editing by Jonathan Oatis

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