ARKANSAS, Nov 03 (Future Headlines)- Southern Co, a major U.S. electric and gas utility, announced on Thursday that it was revising its cost estimates for the Vogtle nuclear expansion project, a two-unit endeavor that has faced challenges related to budgets and schedules. Despite the cost adjustments, the company maintained the project’s timeline.
The Vogtle expansion project has faced extensive delays and cost overruns. While Unit 3, one of the two reactors, successfully entered commercial service in July, Unit 4 has been scheduled for completion in the first quarter of 2024.
In an investor presentation, Southern Co disclosed its updated cost projections for Georgia Power’s share of the Vogtle expansion project, expecting the total cost to be approximately $10.75 billion. This represents a slight increase from the April estimate, which had the project pegged at around $10.59 billion.
The investor presentation also highlighted an issue with one of the four reactor coolant pumps in Unit 4. A “motor fault” was discovered during pre-operational testing, and the faulty pump will be replaced with a spare part from the company’s inventory. Southern Co’s CEO, Christopher Womack, noted that “after successful installation of the spare pump, we will recommence with start-up and pre-operational testing with a projected in-service date during the first quarter of 2024.”
Despite the challenges faced by the Vogtle expansion project, Southern Co announced better-than-expected profits for the third quarter, boosted by increased electricity demand and reduced operating expenses. Notably, the addition of new customers contributed to a 2.1% rise in total retail sales, which reached 42,364 kilowatt-hours during the quarter.
One of the key drivers of improved profitability was a significant decrease in operating expenses, which fell by approximately 21% to $4.87 billion in the three months ending on September 30, compared to the same period in the previous year. This decline was primarily attributed to lower fuel costs.
Following the earnings release, Southern Co’s shares saw a 2.9% increase. Furthermore, peers in the industry, including CMS Energy and Xcel Energy, also reported higher profits for the third quarter.
Southern Co is a major utility provider, serving over 9 million customers. Its electricity segment caters to the states of Alabama, Georgia, and Mississippi, while the gas segment provides services in the states of Illinois, Georgia, Virginia, and Tennessee. Despite the challenges in the Vogtle expansion project, the company’s ability to manage its operations effectively and meet rising electricity demand contributed to its positive financial performance in the quarter.
Reporting by Alireza Sabet; Editing by Sarah White