W|EPC: Southern Company (SO) – Q420 Vogtle Project Monitor – Key Decisions That Could Haunt Cost Prudency

W|EPC: Southern Company (SO) – Vogtle Nuclear Expansion – Q420 Project Monitor – Key Questions That Could Haunt Cost Prudency
Key Takeaways: Vogtle Q420 Monitor – Key Decisions That Could Haunt Cost Prudency

• Who Will Be Getting Stuck With +$2.1B In Cost Overruns? Once Vogtle Unit 4 reaches “fuel load”, Georgia Power/Southern Company (GP/SO) can request a cost prudency determination to push their portion of cost overruns (~$2.1B) into recoverable utility rates. (Page 4)
Regulators will determine cost prudency based on project data, testimony, and a simple question: What should a reasonable manager have done at the time of the decision? (Page 5)
• We expect that process to be heavily scrutinized considering the scale of the overruns, and, in our opinion, some questionable GP/SO decisions. (Pages 4-5)

• Decisions That Could Haunt GP/SO’s Prudency. We believe there’s a case to be made that multiple GP/SO management decisions ran contrary to industry standards, potentially contributing to ($) billions in cost overruns, including
o A failure to either include or implement multiple EPC contract……(Page 7)
o For the first 4-years of the project, GP/SO used only…..(Page 23)
o In 2017, it appears GP/SO did not validate critical underlying EPC…..(Pages 9- 10)