The Southern Company’s ( SO Quick Quote SO - Free Report) troubled Vogtle Electric Generating Plant in the United States — developed by its wholly-owned subsidiary, Georgia Power — has run into yet another problem.
The intensive work to complete and commission the two nuclear units was being examined by federal investigators due to issues relating to construction activities.
The U.S. Nuclear Regulatory Commission (“NRC”) identified quality issues in the electrical cable raceway system at the Unit 3 reactor, which supports the cables that power safety equipment. The conditions, if left incorrectly, would prevent the plant from operating within the NRC’s regulations.
In June, the NRC initiated a special inspection at Plant Vogtle to determine the cause of the additional remediation work for the electrical cable raceway system at Vogtle Unit 3. Notably, the electrical cable raceway systems for commercial nuclear reactors are designed to prevent the disabling of unnecessary safety equipment.
Earlier, the NRC found problems with electrical cables and systems, which were apparently not installed correctly. The improper cable installations increase fire risks, which could break down the redundant safety equipment.
The NRC claimed that the Vogtle workers were aware of the problems but did not report them as part of a system designed to handle such issues. With the issues not resolved, construction work continued and led to additional problems.
However, the complications do not pose a risk as Units 3 and 4 are currently under construction and there is no fuel in the reactor. Hence, the NRC will not allow the licensee to load fuel and operate Vogtle Unit 3 until the construction is completed and complies with the conditions identified in their combined license.
The Vogtle nuclear expansion project suffered continued timing and cost overrun issues over the years. In May 2021, the in-service date for the third unit was delayed because of a finding from additional construction remediation work to address the project-related issues. The nuclear expansion of Vogtle Unit 3 fell further behind the utility’s revised deadline as it encountered an unexpected array of quality issues, resulting in millions of dollars in penalties.
The Vogtle nuclear expansion project is regarded as the largest employment-generating construction project in Georgia, which will create more than 800 permanent jobs once online and power more than 500,000 homes and businesses. Notably, the two new units are crucial for the utility's aim to deliver clean and reliable energy for customers.
Company Profile & Price Performance
Headquartered in Atlanta, GA, Southern Company is one of the largest utilities in the United States.
Shares of this utility have outperformed the
industry in the past six months. Its stock has gained 13.7% compared with the industry’s 10.7% growth.
Image Source: Zacks Investment Research Zacks Rank & Stocks to Consider
Southern Company currently carries a Zack Rank #3 (Hold).
Some better-ranked players in the utility space are
Otter Tail Corporation ( OTTR Quick Quote OTTR - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy), and Middlesex Water Company ( MSEX Quick Quote MSEX - Free Report) and California Water Service Group ( CWT Quick Quote CWT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
In the past 60 days, the Zacks Consensus Estimate for Otter Tail’s 2021 earnings has been raised by 39.2%.
Middlesex’s earnings for 2021 are expected to increase 10.1% year over year.
California Water Services’ earnings for 2021 are expected to rise 3.4% year over year.