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Southern Company (SO) Revises Schedule for Vogtle Nuclear Units

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The Southern Company’s (SO - Free Report) wholly-owned subsidiary, Georgia Power, postponed the in-service dates for the two new reactors at its troubled Vogtle Electric Generating Plant in the United States.

Already running behind schedule, Georgia Power once again pushed back the start-up dates for Vogtle Unit 3 to third-quarter 2022 and Unit 4 to second-quarter 2023. The revised dates demonstrate a three-month delay for each unit.

The Vogtle nuclear expansion project suffered continued timing and cost overrun issues over the years. This is the fourth time in the last six months that the utility announced a further delay to the completion of the two units. The delay was mainly in view of the need for additional time to tackle the continued challenges relating to construction activities. The additional time would enable Georgia Power to fulfill the quality and safety standards for the project.

Georgia Power’s customers have been paying Vogtle financing costs and a portion of its profits on the huge nuclear power project for years. Notably, the latest announcement came as the state’s Public Service Commission (PSC) members are considering how much of the project’s construction costs should be added to the customer bills.

Earlier this month, Georgia Power entered an agreement with the PSC’s public interest advocacy staff, which would add $2.1 billion of Vogtle construction expenses into the utility’s rate base once the first reactor is completed. Under this situation, a regular residential customer’s monthly bill could rise $3.78. Additional costs could be added to customers’ bills after the completion of the second unit.

The Vogtle nuclear expansion project has also been a driver of economic growth in the region during its construction. Despite the delays, development at the project’s site has been steady and evident. The utility mentioned that the Vogtle Unit 3 is 99% complete, while the overall project is 95% complete.

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 underperformed the industry in the past six months. The stock has declined 0.6% against the industry’s 1.5% growth.

 

Zacks Investment ResearchImage 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 NextEra Energy, Inc. (NEE - Free Report) , Brookfield Infrastructure Partners LP (BIP - Free Report) and WEC Energy Group, Inc. (WEC - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NextEra’s earnings for 2021 are expected to increase 9.2% year over year.

Brookfield’s earnings for 2021 are expected to rise 14.7% year over year.

WEC Energy’s earnings for 2021 are expected to increase 6% year over year.