Vogtle agreement caps Toshiba obligation

News Article

The most Toshiba may have to pay the owners of the Vogtle nuclear power plant construction project is $3.68 billion under an agreement signed on 9 June. Georgia Power has also finalised a new service agreement with Westinghouse allowing for the transition of project management.

By World Nuclear News
Tuesday, June 13, 2017

Toshiba Corp is the parent company of Westinghouse - contractor for the project to build the two AP1000s at Vogtle in Georgia - which filed for Chapter 11 bankruptcy in March. A parental guarantee obligation was agreed by Toshiba and Vogtle's owners - Southern subsidiary Georgia Power (45.7%), Oglethorpe Power (30%), MEAG Power (22.7%) and Dalton city (1.6%) - when Westinghouse received the order for the units in 2008.

The new agreement fixes Toshiba's maximum obligation under the parental guarantee to $3.68 billion, with payments to be made in instalments during the period from October 2017 to January 2021. According to Toshiba, the agreement specifies that the agreed maximum cannot be subjected to any further increases or claims by the plant's owners "even in the event of future increases in construction costs".

The maximum amount has already been incorporated into Toshiba's financial outlook for fiscal 2016, announced on 15 May, as part of a JPY980 billion ($8.9 billion) provision for parent company guarantees and a reserve for losses against loans. It will therefore have no additional impact on Toshiba's financial results, the company said.

If actual construction costs are less than the specified maximum amount, Toshiba will have the right to receive "part of the benefit of the difference" as Westinghouse's creditor.

Toshiba said it was still in negotiations with the owners of the VC Summer plant in South Carolina- Scana Corporation and Santee Cooper - in respect of its parent company guarantee obligations and payment schedule.

"Toshiba aims to finalise the total maximum amount of the parent company guarantee for all four nuclear reactors under construction in the US, and will ensure prompt disclosure of information related to this matter as and when it becomes available," it said.

Service agreement finalised

Construction work at Vogtle and Summer has been continuing under interim assessment agreements with the plants' respective owners since Westinghouse's bankruptcy filing. In May, Georgia Power announced that it, together with Southern Nuclear, would take over project management for Vogtle. The interim assessment agreement for Vogtle has now been extended to 22 June.

The new service agreement finalised by Georgia Power and Westinghouse will allow for the transition of project management at Vogtle from Westinghouse to Southern Nuclear and Georgia Power and will take effect after approval of the bankruptcy court it granted, and the rejection of the current engineering, procurement and construction contract by Westinghouse. The conditional agreement, which also requires approval by Westinghouse's board of directors, includes engineering, procurement and licensing support as well as access to intellectual property needed for the project.

Georgia Power president and CEO Paul Bowers said the "positive developments" with Toshiba and Westinghouse allowed momentum to continue at the site during the project management transition process.

"We are continuing to work with the project's co-owners to complete our full-scale schedule and cost-to-complete analysis and will work with the Georgia Public Service Commission to determine the best path forward for our customers," he said.

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News Release

June 15, 2017 – Ottawa

The Canadian Nuclear Safety Commission (CNSC) announced today its decision to renew New Brunswick Power Corporation’s (NB Power) Nuclear Power Reactor Operating Licence for the Point Lepreau Nuclear Generating Station (PLNGS), located on the Lepreau Peninsula, NB. This decision was made following a two-part public hearing held on January 26, 2017 in Ottawa, ON and on May 9–11, 2017 in Saint John, NB. The licence will be valid from July 1, 2017 until June 30, 2022.

In making its decision, the Commission considered submissions from NB Power and 94 intervenors, as well as CNSC staff’s recommendations.

CNSC staff will report annually on the performance of the PLNGS at a public Commission meeting where members of the public will have the opportunity to intervene.

The Summary Record of Decision is available in both official languages on the CNSC website at nuclearsafety.gc.ca or by contacting the CNSC Secretariat. A detailed Record of Decision will be published on the CNSC website at a later date. Hearing transcripts can be obtained on the CNSC website or by contacting the CNSC. The hearing webcast is available on the same site for 90 days.

The Canadian Nuclear Safety Commission regulates the use of nuclear energy and materials to protect health, safety, security and the environment; to implement Canada’s international commitments on the peaceful use of nuclear energy; and to disseminate objective scientific, technical and regulatory information to the public.

 

Quick Facts

  • NB Power owns and is licensed to operate the Point Lepreau Nuclear Generating Station

  • NB Power also operates a nuclear waste management facility at the station

  • The CNSC has full-time staff onsite who perform inspections to evaluate operations and to verify compliance with regulatory requirements and licence conditions

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Contacts

Aurèle Gervais
Media Relations
Canadian Nuclear Safety Commission
Tel: 613-996-6860 or 1-800-668-5284

Email: cnsc.mediarelations-relationsmedias.ccsn@canada.ca


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