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Will Southern's (SO) Vogtle Perish Post Dec 21 PSC Verdict?
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Georgia Public Service Commission (PSC) will take a final call regarding The Southern Company’s (SO - Free Report) Vogtle project on Dec 21. Initially, the hearing was scheduled for February 2018 but the PSC decided to prepone the judgment date due to changes in the tax code that could affect the company’s returns.
The pending package of tax changes in Congress is set to cut federal corporate tax rates to as low as 20% effective Jan 1, 2018 which can affect how much Southern Company can recover from ratepayers in connection with the Vogtle plant expansion project.
The Vogtle nuclear reactors have been grappling with cost overruns and scheduling delays since the commencement of the construction. Bankruptcy of Westinghouse — the major construction contractor of the two nuclear reactors of the plant — aggravated the costs further and led to more delays. Since then a cloud of uncertainty has been hovering over the beleaguered plant. The project is already running three years behind schedule and is over budget by more than $10 billion which is likely to go up to $20 billion by 2022.
The Vogtle project has been receiving censure owing to its ballooning costs. Georgia’s regulatory staff want to call off the project unless Southern Company and Georgia Power bear part of the ballooning cost. Georgia Power is of the belief that customers should bear the additional cost of the project. This is in sharp contrast with the views of the regulatory staff who believe that such inflated cost would be a burden on customers. They believe that once the project is completed ratepayers are likely to bear higher costs with reduced benefits and hence want to pull the plug on the project.
On a positive note, Toshiba recently paid the entire guaranteed amount of $3.68 billion which it had promised for the expansion of the project. Southern Company also received around $10-billion federal loan guarantee for Vogtle Project, emphasizing the government’s faith in the future of nuclear energy in the nation.
Georgia Power, subsidiary of Southern Company, is the chief owner of the project with a 45.7% interest. The other co-owners include Oglethorpe Power, MEAG Power and Dalton Utilities. As of now, Vogtle plant in Georgia is the only nuclear project which is under construction in the United States. In August, South Carolina Electric & Gas — subsidiary of SCANA Corporation — terminated the construction of $18-billion VC Summer nuclear project in South Carolina. Duke Energy Corporation (DUK - Free Report) also announced the abandonment of Lee III Nuclear Generating Station in South Carolina.
Southern Company believes that the plant will make the United States nuclear competitive, helping the nation catch up with the likes of Russia and China. If the project gets scrapped, it will be a huge blow to the nuclear industry of America.
Zacks Rank and Stocks to Consider
Southern Company is one of the largest and best-managed electric utility holding companies in the United States. The company has a Zacks Rank #2 (Buy).
Northern Oil and Gas delivered an average beat of 175% in the last four quarters.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Will Southern's (SO) Vogtle Perish Post Dec 21 PSC Verdict?
Georgia Public Service Commission (PSC) will take a final call regarding The Southern Company’s (SO - Free Report) Vogtle project on Dec 21. Initially, the hearing was scheduled for February 2018 but the PSC decided to prepone the judgment date due to changes in the tax code that could affect the company’s returns.
The pending package of tax changes in Congress is set to cut federal corporate tax rates to as low as 20% effective Jan 1, 2018 which can affect how much Southern Company can recover from ratepayers in connection with the Vogtle plant expansion project.
The Vogtle nuclear reactors have been grappling with cost overruns and scheduling delays since the commencement of the construction. Bankruptcy of Westinghouse — the major construction contractor of the two nuclear reactors of the plant — aggravated the costs further and led to more delays. Since then a cloud of uncertainty has been hovering over the beleaguered plant. The project is already running three years behind schedule and is over budget by more than $10 billion which is likely to go up to $20 billion by 2022.
The Vogtle project has been receiving censure owing to its ballooning costs. Georgia’s regulatory staff want to call off the project unless Southern Company and Georgia Power bear part of the ballooning cost. Georgia Power is of the belief that customers should bear the additional cost of the project. This is in sharp contrast with the views of the regulatory staff who believe that such inflated cost would be a burden on customers. They believe that once the project is completed ratepayers are likely to bear higher costs with reduced benefits and hence want to pull the plug on the project.
On a positive note, Toshiba recently paid the entire guaranteed amount of $3.68 billion which it had promised for the expansion of the project. Southern Company also received around $10-billion federal loan guarantee for Vogtle Project, emphasizing the government’s faith in the future of nuclear energy in the nation.
Georgia Power, subsidiary of Southern Company, is the chief owner of the project with a 45.7% interest. The other co-owners include Oglethorpe Power, MEAG Power and Dalton Utilities. As of now, Vogtle plant in Georgia is the only nuclear project which is under construction in the United States. In August, South Carolina Electric & Gas — subsidiary of SCANA Corporation — terminated the construction of $18-billion VC Summer nuclear project in South Carolina. Duke Energy Corporation (DUK - Free Report) also announced the abandonment of Lee III Nuclear Generating Station in South Carolina.
Southern Company believes that the plant will make the United States nuclear competitive, helping the nation catch up with the likes of Russia and China. If the project gets scrapped, it will be a huge blow to the nuclear industry of America.
Zacks Rank and Stocks to Consider
Southern Company is one of the largest and best-managed electric utility holding companies in the United States. The company has a Zacks Rank #2 (Buy).
Southern Company (The) Price
Southern Company (The) Price | Southern Company (The) Quote
A better-ranked player in the energy space is Northern Oil and Gas, Inc. (NOG - Free Report) which sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Northern Oil and Gas delivered an average beat of 175% in the last four quarters.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>