Item 8.01 Other Events.
On June 15, 2021, Georgia Power Company ("Georgia Power") filed an application
with the Georgia Public Service Commission ("PSC") to adjust retail base rates
to include the portion of costs related to its investment in Plant Vogtle Unit 3
("Unit 3") and common facilities shared between Plant Vogtle Units 3 and 4
("Common Facilities") previously deemed prudent by the Georgia PSC ($2.380
billion), as well as the related costs of operation.
The request includes an annual rate increase totaling approximately $369 million
to be effective the month after Unit 3 is placed in service. Unit 3 is currently
scheduled to be placed in service in the first quarter 2022. This increase will
be partially offset by a decrease in the Nuclear Construction Cost Recovery
("NCCR") tariff of approximately $134 million expected to be effective January
1, 2022. In addition, an estimated $44 million of fuel cost savings related to
Unit 3 is already incorporated in Georgia Power's current fuel cost recovery
rates.
Georgia Power also is requesting to defer some of its 2022 financing costs
(approximately $51 million) relating to the remaining portion of the total Unit
3 and Common Facilities construction costs not being recovered through the NCCR
tariff until Unit 4 costs are placed in retail base rates.
Georgia Power expects the Georgia PSC to issue a final order in this matter on
November 2, 2021. The ultimate outcome of this matter cannot be determined at
this time.
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this Current Report on Form 8-K is
forward-looking information based on current expectations and plans that involve
risks and uncertainties. Forward-looking information includes, among other
things, statements concerning the expected schedule for completion of
construction and start-up of Plant Vogtle Unit 3. The Southern Company
("Southern Company") and Georgia Power caution that there are certain factors
that can cause actual results to differ materially from the forward-looking
information that has been provided. The reader is cautioned not to put undue
reliance on this forward-looking information, which is not a guarantee of future
performance and is subject to a number of uncertainties and other factors, many
of which are outside the control of Southern Company and Georgia Power;
accordingly, there can be no assurance that such
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suggested results will be realized. The following factors, in addition to those
discussed in Southern Company's and Georgia Power's Annual Reports on Form 10-K
for the year ended December 31, 2020, and subsequent securities filings, could
cause actual results to differ materially from management expectations as
suggested by such forward-looking information: the potential effects of the
continued COVID-19 pandemic; the ability to control costs and avoid cost and
schedule overruns during the development, construction, and operation of
facilities or other projects, including Plant Vogtle Units 3 and 4, which
includes components based on new technology that only within the last few years
began initial operation in the global nuclear industry at this scale, due to
current and future challenges which include, but are not limited to, changes in
labor costs, availability and productivity, challenges with management of
contractors or vendors, subcontractor performance, adverse weather conditions,
shortages, delays, increased costs, or inconsistent quality of equipment,
materials, and labor, contractor or supplier delay, delays due to judicial or
regulatory action, nonperformance under construction, operating, or other
agreements, operational readiness, including specialized operator training and
required site safety programs, engineering or design problems, design and other
licensing-based compliance matters, including inspections and the timely
submittal by Southern Nuclear of the Inspections, Tests, Analyses, and
Acceptance Criteria documentation for each unit and the related reviews and
approvals by the Nuclear Regulatory Commission ("NRC") necessary to support NRC
authorization to load fuel, challenges with start-up activities, including major
equipment failure, or system integration, and/or operational performance, and
challenges related to the COVID-19 pandemic; the ability to overcome or mitigate
the current challenges at Plant Vogtle Units 3 and 4, that could further impact
the cost and schedule for the project; legal proceedings and regulatory
approvals and actions related to construction projects, such as Plant Vogtle
Units 3 and 4, including PSC approvals and NRC actions; under certain specified
circumstances, a decision by holders of more than 10% of the ownership interests
of Plant Vogtle Units 3 and 4 not to proceed with construction and the ability
of other Vogtle owners to tender a portion of their ownership interests to
Georgia Power following certain construction cost increases; the ability to
construct facilities in accordance with the requirements of permits and licenses
(including satisfaction of NRC requirements), to satisfy any environmental
performance standards and the requirements of tax credits and other incentives,
and to integrate facilities into the Southern Company system upon completion of
construction; the inherent risks involved
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in operating and constructing nuclear generating facilities; the ability of
counterparties of Georgia Power to make payments as and when due and to perform
as required; the direct or indirect effect on Georgia Power's business resulting
from cyber intrusion or physical attack and the threat of physical attacks;
catastrophic events such as fires, earthquakes, explosions, floods, tornadoes,
hurricanes and other storms, droughts, pandemic health events, political unrest
or other similar occurrences; and the direct or indirect effects on Georgia
Power's business resulting from incidents affecting the U.S. electric grid or
operation of generating or storage resources. Southern Company and Georgia Power
expressly disclaim any obligation to update any forward-looking information.
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