The Nuclear Regulatory Commission (NRC) of the U.S. has approved Southern Company’s (SO) proposal to set up two new nuclear reactors at the Vogtle nuclear station in Georgia. As per the review reports of the Commission, the Vogtle projects does not pose a threat to the environment.
However, NRC must still clear the safety evaluation report on the project and will issue the license based on voting by the five-member commission during the fourth quarter of 2011. Following the final green signal from the authority, reactors are expected to be operational in 2016 and 2017.
Southern stated that it plans to use Westinghouse’s AP1000 reactors, with a generating capacity of 1,100 megawatts. Each of the reactors will supply enough electricity to meet demand in about 275,000 homes in Georgia. These AP1000 reactors are designed on higher safety norms than those followed at the Fukushima plant.
Keeping in view the radiation leakage at Japan’s Fukushima Daiichi nuclear-power complex, following the dreadful March 11 earthquake and tsunami, the U.S. company is treading on a cautious path to keep any such disaster at bay in the future. Backed by support from the country’s higher authorities, Southern is striving to built a safe nuclear-power industry.
Southern’s nuclear venture will be financed by the Energy Department through a loan guarantee scheme valued at $8.3 billion. In case the company defaults on repayment of the financing, the U.S. federal government would pay up to 80% of the loan.
Located at 26 miles to the southeast of Augusta, the Vogtle nuclear power station already houses two reactors. The project, worth $14 billion, has four partners, with Southern enjoying the lion’s share with 45.7% interest.
Headquartered in Atlanta, Georgia, Southern is one of the largest generators of electricity in the nation, serving both regulated and competitive markets across southeastern United States. It is a holding company for four regulated southern electric utilities that serve about 4.4 million customers –– Georgia Power, Alabama Power, Gulf Power and Mississippi Power.
We are maintaining our long-term Neutral recommendation on the stock. Southern Company, which competes with peers such as Exelon Corp. (EXC) and The AES Corp. (AES), currently retains a Zacks #3 Rank, translating into a short-term Hold rating.
AES CORP (AES): Free Stock Analysis Report
EXELON CORP (EXC): Free Stock Analysis Report
SOUTHN COMPANY (SO): Free Stock Analysis Report
Zacks Investment Research
