Moody's Investors Service on Tuesday raised the outlook of Southern Co. and its Georgia Power subsidiary to “positive” from “stable” on progress with the Vogtle nuclear power plant expansion.
"The positive outlooks for Southern and Georgia Power reflect their improving business risk profiles following the successful commercial operation of Vogtle Unit 3 in late July and the completion of Unit 4 on the horizon," Jeff Cassella, Moody's vice president–senior credit officer, said.
The positive outlooks include Moody’s expectation that an agreement on Vogtle cost recovery will be approved without significant changes, which will allow Georgia Power and Southern to improve their financial profiles when the nuclear units are in service, Cassella said.
The 1,100-MW Vogtle Unit 3 entered commercial operation on July 31, according to the credit ratings agency.
A month later, Atlanta-based Georgia Power reached an agreement with key parties, including the Georgia Public Service Commission staff and the Georgia Association of Manufacturers, that would allow for recovery of $7.6 billion in total construction and capital costs for Vogtle Units 3 and 4, Moody’s said.
If approved, the agreement will resolve all issues related to reasonableness, prudence and recovery of costs for Georgia Power's 45.7% stake in the nuclear units, according to the ratings agency. Under the agreement, Georgia Power’s retail rates will increase after Unit 4 starts operating, which the company expects by the end of March, Moody’s said.
Moody’s said Georgia Power’s business risk has been eased by a supportive regulatory and political environment, and continued co-owner support for the new Vogtle units, despite pending litigation with two co-owners over how much of the project’s costs should be shared.
“We continue to expect key stakeholders, including state regulators and co-owners, to remain supportive of the project,” Moody’s said.
Southern Nuclear will operate Vogtle 3 and 4 on behalf of the co-owners: Georgia Power, Oglethorpe Power (30%), the Municipal Electric Authority of Georgia (22.7%) and Dalton Utilities (1.6%).
The ratings agency also upgraded ratings for Mississippi Power — a Southern Co. subsidiary — to “A3” from “Baa1,” and changed its outlook to stable from positive.
Although the Mississippi Public Service Commission provides a supportive credit environment, Mississippi Power's rating is constrained by the company's relatively small size, weak economic growth in Mississippi and the state’s susceptibility to extreme weather events such as storms and tornadoes, Moody’s said.
Georgia Power seeks power supplies
Meanwhile, Georgia Power on Tuesday issued a request for information for power supplies from standalone energy storage, storage coupled with a renewable resource, and thermal generation.
Georgia Power’s most recent integrated resource plan indicated the utility needs an additional 3,723 MW through the winter of 2031, but more recent forecasts show greater and earlier capacity needs, the company said in the RFI.
Georgia Power is seeking power supplies that can be delivered in the 2026 to 2030 timeframe. It will consider power purchase agreements, asset purchases and build-transfer arrangements. Responses to the RFI are due by Oct. 24.
