Ga Power Company Application Part 1

8/2/2019 Ga Power Company Application Part 1

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Georgia Power CompanyDOE Loan Guarantee Application

GPC Vogtle Expansion ProjectSeptember 2008

NOTICE ON DISCLOSURE AND USE OF DATAThe data and information contained in pages 2 - 54 of this document and any electronic file which herebyforms a part of the Application have been submitted to DOE by Georgia Power Company in confidenceand contain trade secrets and proprietary information and meet the criteria for protection from publicdisclosure in 5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f) By way of this notice,the applicant hereby invokes all of the procedural and substantive protections in these provisions of lawand other applicable law with respect to this data and information. The data and information shall beused by DOE only for the purpose of evaluating this application under DOE's Loan Guarantee Programunder Title XVII of the Energy Policy Act of 2005. If his applicant is issued a loan guarantee under TitleXVII of the Energy Policy Ac t of 2005 as a result of or in connection with the submission of thisApplication, this data and information shall continue to be claimed as confidential, trade secret, andproprietary unless and until such claim is withdrawn or altered in the final loan guarantee agreement or byother written communication from Georgia Power Company. This restriction does not limit theGovernment's right to use or disclose data obtained without restriction from any other source.


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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Project Loan Guarantee Application. DO E and other required reviewers shall use the information only fo r purposes ofreview and evaluation.Table of Contents

LIST O F TABLES ............................................................................................. 4LIST OF APPENDICES ............................................................................................ 4LIST O F ABBREVIATIONS ............................................................................................ 4Section A Application Information 7

1. Project Name 72. Evidence of Authority 73. Applicant Validation Statement 74. Eligible Lender/Holder Statement 75. Equity Commitment Letters 76. Project Participants 77. Applicant Point of Contact 9

Section B Project Description 101. Executive Summary 102. Technology Description 123. Project Eligibility 13A. Substantial Environmental Benefits 14B. New or Significantly Improved Technology 154. Organization 165. Prior Experience 196. Project Sponsor's Capabilities 207. Proposed Project Location 218. State and Local Support 229. Project Time Lines 2210. Key Material Components 2211 . List and Status of Licenses/Permits/Approvals 2412. Detailed Total Project Cost 2413. Loan Guarantee Impact 24

Section C Technical Information 261. Key Contracts and Agreements 26A. Engineering Procurement Construction (EPC) Contract 26B. Long Lead Procurements 26C. Fuel Supply Agreements 26D. Operations and Maintenance (O&M) Contracts 27E. Other 27

Georgia Power Company CONFIDENTIAL AN D PROPRIETARYSeptember 2008 2


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GP C Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Project Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes ofreview and evaluation.2. Major Project Plans 373. Potential Environmental Impacts 38A. Facilities 39B. Project Location 39

C. Proposed Project Construction and Operation 40i Project Construction and Operations 40ii Schematic Process Diagram 42iii Upset / Error / Incident / Accident Scenarios 42D. Project Progression 43E. Status of Other Environmental and Regulatory Reviews 44F. Alternative Sites or Operating Parameters 45G. Post-Operational Requirements 45H. Other Actions in the Project Area 46

Section D Business Plan 481. Potential Project Offtake 482. Summary Business Plan 49A. Financing Plan 49B. Market Analysis 49C. Management Planning 50D. Operational Risks and Mitigation Strategies 50

Section E Financial Plan 511. Background and Legal Structure 512. Legal Authority 523. Financial Statements 524. Credit History 535. Litigation and/or Conflicts 536. Financial Model 53

Section F Application Certifications 541. Certifications and Assurances 54

Georgia Power Company CONFIDENTIAL AND PROPRIETARYSeptember 2008 3


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GPC Vogtle. Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.List of Tables

Table PageB3-1: Comparative Emissions Data 14

List of AppendicesAppendix Content

A Evidence of AuthorityB Equity Commitment LetterB.1 New Generation and Environmental ProgramsC Site Location MapD Key Milestone ScheduleE Licenses, Permits, and ApprovalsF Early Site Permit Environmental ReportG Draft Environmental Impact StatementH Statutory Provisions - IRP and CertificationH.01 Service Territory Economic OutlookH.02 Planned Capacity AdditionsH.1 Project Organizational ChartI Statutory P rovisions - IncorporationJ Statutory P rovisions - Issuance of IndebtednessK GP C Annual Financial StatementsL GPC Current Year Quarterly Financial StatementsM GP C Credit HistoryN Financial ModelO Certifications and Assurances

List of A bbreviationsAC Alternating CurrentAlabama Power Alabama Power CompanyASLB Atomic Safety and Licensing BoardASME American Society of Mechanical EngineersCDF Core Damage FrequencyCERCLA Comprehensive Environmental Response, Compensation, andLiability ActCFR Code of Federal RegulationsCIP Construction Inspection Program

'CO Carbon MonoxideCO2 Carbon Dioxide



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.CO L Construction and Operating LicenseCOLA Construction and Operating License ApplicationConsortium Westinghouse and Stone & WebsterCo-Owners Oglethorpe Power, Th e Municipal Electric Authority of Georgia,and Dalton UtilitiesCWIP Construction Work In ProgressDalton Utilities City of Daltondays/yr Days per YearDCD Design Control DocumentDEIS Draft Environmental Impact StatementDOE Department of EnergyEAB Exclusion Area BoundaryEPA Environmental Protection AgencyEPC Engineering, Procurement, and ConstructionESP Early Site PermitESPER Early Site Permit Environmental ReportFEIS Final Environmental Impact StatementFERC Federal Energy Regulatory CommissionFFB Federal Financing BankFNP Joseph M. Farley Nuclear PlantFSER Final Safety Evaluation ReportGEIS Generic Environmental Impact StatementGPC Georgia Power CompanyGPSC Georgia Public Service CommissionHNP Hatch Nuclear Planthrs/mo Hours pe r MonthIIC Intercompany Interchange ContractINPO Institute of Nuclear Power OperationsIRP Integrated Resource PlanIRPP Integrated Resource Planning ProcessJBIC Japanese Bank for International CooperationLb/yr Pounds per YearLWA Limited Work AuthorizationMEAG The Municipal Electric Authority of GeorgiaMT Metric TonMW MegawattsMWe Megawatt ElectricMW t Megawatt ThermalNEPA National Environmental Policy ActNO x Nitrogen OxidesNPL National Priorities ListNQA National Quality AssuranceNR C Nuclear Regulatory Commission



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.NSR New Source ReviewNUREG Nuclear Regulatory CommitteeO&M Operations and MaintenanceOPC Oglethorpe Power CompanyOwners Georgia Power Company (GPC), Oglethorpe Power Company(OPC), The Municipal Electric Authority of Georgia (MEAG), andthe City of DaltonPM Particulate MatterPW R Pressurized Water ReactorS&W Stone & Webster, Inc.SCS Southern Company ServicesSER Safety Evaluation reportShaw The Shaw Group, Inc.SNC Southern Nuclear O perating CompanySO Southern CompanySO2 Sulfur DioxideSR S Savannah River SiteTenaska Tenaska, Inc.URD Utility Requirements DocumentVEGP Vogtle Electric Generating PlanWEC Westinghouse Electric Company, LLC



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.1 1(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.

Section A: Application Information1. Project Name

For the purposes of this application, the project will be referred to as the "GPC VogtleExpansion Project." This specifically refers to G PC's 45.7% undivided ownershipinterest in Vogtle Electric Generating Plant (VEGP) Units 3 and 4.2. Evidence of Authority

Evidence of Authority is hereby attached as Appendices Al and A2.3. Applicant Validation Statement

Georgia Power Company (GPC, Georgia Power, or the Company) is of the opinionthat, based on the project information that will be provided in this application, there isa reasonable prospect that the indebtedness to be incurred with respect to the GPCVogtle Expansion Project that would be guaranteed by the Department of Energy(DOE) will be repaid on time and in full (including interest) from the cash flows ofGPC. GPC will submit a financial model with its complete Part I Application to befiled at a later date.4. Eligible Lender/Holder Statement

[REDACTED********************************************************************************

An y debt associated with the GPC Vogtle Expansion Project's non-eligible costs isexpected to be small in relation to the total cost of the project. These non-eligiblecosts are likely be financed through traditional GP C financing sources, such ascommercial paper, bank term loans, or senior unsecured notes, and suchindebtedness will not be collateralized by the assets or resources of the GPC VogtleExpansion Project.5. Equity Commitment Letters

GPC's Equity Commitment Letter is hereby attached as Appendix B.6. Project Participants

The following organizations will contribute to the GPC Vogtle Expansion Project:* GPC* Southern Nuclear Operating Company (SNC, or Southern Nuclear)* Southern Company Services (SCS)



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.* Westinghouse Electric Company LLC (WEC, or Westinghouse).* Stone & Webster, Inc. (S&W)GP C is a wholly owned subsidiary or The Southern Company (Southern Company),and is a vertically integrated utility providing electricity to regulated retail customersin Georgia and wholesale customers within the southeastern United States. GPC isregulated by the Georgia Public Service Commission (GPSC), the Federal EnergyRegulatory Commission (FERC), and the Nuclear Regulatory Commission (NRC).The Company currently owns and operates forty-nine existing coal-fired, nuclear,combined-cycle, combustion turbine, and hydroelectric facilities within the State ofGeorgia. GPC plans to co-own VEGP Units 3 & 4 with Oglethorpe PowerCorporation (OPC, or Oglethorpe), The Municipal Electric Authority of Georgia(MEAG) and the City of Dalton, Georgia, acting through its Board of Water, Light andSinking Fund Commissioners (Dalton Utilities or Dalton, and together with OPC and

MEAG the Co-Owners). GP C or its agent, Southern Nuclear, will perform allenvironmental permitting and compliance activities ne cessary to obtainauthorizations to construct and operate VEGP Units 3 and 4.SNC is a wholly owned subsidiary of Southern Company and is engaged in theoperation of nuclear power plants on behalf of Southern Company and itssubsidiaries. SN C wa s organized in 1990 for the purpose of operating nuclearfacilities owned by other subsidiaries of Southern Company. SN C operates theEdwin I. Hatch Nuclear Plant (HNP), Units 1 and 2; and VEGP, Units 1 and 2, forGPC, Oglethorpe, MEAG, and Dalton Utilities (the Owners). SN C also operates theJoseph M. Farley Nuclear Plant (FNP) Units 1 and 2 for Alabama Power Company.The combined electric generation of the three plants is in excess of 6,000 megawatts(MWs).SNC is the applicant for the combined Construction and Operating License (COL)with the Nuclear Regulatory Commission (NRC) and will construct and operate thenew VEGP Units 3 and 4 on behalf of the Owners. SN C has entered intoagreements with GPC (and GPC with the Co-Owners) to provide SN C the authorityto apply for and hold a COL, and to operate the facilities on each Owner's behalf.SN C is granted the authority, on behalf of the Owners, to manage all aspects of plantconstruction and operation including but not limited to management of theconstruction of VEGP Units 3 and 4, control of the exclusion area, security, andemergency planning.SCS is a wholly owned subsidiary of Southern Company that provides supportservices to affiliate operating companies, and ma y also function as GPC's agent.SCS will provide a variety of support services during the GPC Vogtle ExpansionProject, including the preparation and submittal of the Loan Guarantee Applicationon behalf of GPC.As described in section C.1, GPC has entered into an Engineering, Procurement andConstruction (EPC) agreement with a consortium comprised of WEC and S&W (theConsortium), pursuant to which the Consortium will design, procure and constructVEGP Units 3 and 4, which w ill be two approximately 1,100 MW WestinghouseAP1000 nuclear units.



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905. and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.WEC, a group company of Toshiba Corporation, is the w orld's pioneering nuclearpower company and is a leading supplier of nuclear plant products and technologiesto utilities throughout the world. Westinghouse is engaged in the business ofdesigning, developing, supplying and testing the commercial nuclear facilities atVEGP Units 3 and 4 and has developed.the pressurized water Nuclear Power Plantknown as the AP1000 for which the US NRC has issued a final design certification.Today, Westinghouse technology is the basis for approximately one-half of theworld's operating nuclear plants, including 60 percent of those in the United States.In concert with S&W, a subsidiary of Shaw, Westinghouse will supply the AP1000units that are the subject of the GP C Vogtle Expansion Project.S&W is a leading global provider of EPC contracts, and will be engaged in thebusiness of designing and constructing the power generation facilities at VEGP Units3 and 4. In concert with WEC, S&W will supply the AP1000 units that are the subjectof the GPC Vogtle Application. In July 2000, the assets of S&W were acquired byThe Shaw Group, Inc (Shaw), who is also a 20 percent owner of WEC. Shaw is aleading global provider of technology, engineering, procurement, construction,maintenance, fabrication, manufacturing, consulting, remediation and facilitiesmanagement services for government and private sector clients in the energy,chemicals, environmental, infrastructure and emergency response markets.If information from other project contributors is needed, please contact the GPCVogtle Expansion Project contacts below and they will be glad to provide thenecessary contact information at that time.

7. Applicant Point of ContactThe primary contact for this Application is: Th e secondary contact is:Earl Long Steven NicholsAssistant Treasurer Sr. Financial AnalystSouthern Company Southern Company Services30 Ivan Allen Jr Boulevard BIN SC1407 30 Ivan Allen Jr Boulevard, BIN SC1407Atlanta, GA, 30308 Atlanta, GA, 30308Phone: 404-506-0783 Phone: 404-506-0776E-mail: [email protected] E-mail: [email protected]: 404-506-0717 Fax: 404-506-0717



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.

Section B: Project Description1. Executive Summary

Ifcertified by the Georgia Public Service Commission (GPSC) and licensed by theNRC, SNC will construct and operate the new VEGP Units 3 and 4 on behalf of, andin order to provide electric generating capacity for, GPC and the Co-Owners. Thetwo Westinghouse AP1000 units, with a capacity of approximately 1,100 megawattseach, would be constructed at the VEGP site near Waynesboro, Georgia and wouldbe placed in service in 2016 and 2017, respectively.On April 8, 2008, GPC, acting for itself and as agent for the Co-Owners, and theConsortium entered into an EPC agreement to design, engineer, procure, construct,and test two AP1000 nuclear units and related facilities, structures, andimprovements at VEGP (EPC Agreement).The EPC Agreement isan arrangement whereby the Consortium supplies andconstructs the entire facility with the exception of certain items provided by theOwners. Under the terms of the EPC Agreement, the Owners will pay a purchaseprice that will be subject to certain price escalation and adjustments, adjustments forchange orders, and performance bonuses. The estimated plant value to be placed inservice also includes financing costs, transmission, initial nuclear fuel load and othercosts that are the responsibility of the Co-Owners, as well as expected inflation.GPC's proportionate share of the estimated in-service cost of VEGP Units 3 and 4,based on its current ownership interest of 45.7 percent and subject to the escalationsand adjustments mentioned above, is approximately $6.9 billion. [REDACTED *********************************************].

The following are key milestone and projection dates for the GPC Vogtle ExpansionProject:* Early Site Permit (ESP) filed with the NRC on August 15, 2006o NRC issued Safety Evaluation Report (SER) with open item on August30, 2008

* NRC issued draft environmental impact statement (DEIS) on September 14,2007* NRC issued a Final Environmental Impact Statement (FEIS) on August 13,2008* Limited Work Authorization (LWA) submitted to the NRC on August 16, 2007* Combined construction and operating license application (COLA) filed withNRC on March 31 , 2008

o The COLA was accepted as sufficient and docketed by NRC on May31,2008.Georgia Power Company CONFIDENTIAL AN D PROPRIETARYSeptember 2008 10


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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.1 1(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

* Site Preparation commences in third quarter of 2008* Target date to close DOE Loan Guarantee - September 2009, unless theexpiration of DOE's loan guarantee budget allocation is extended beyondthat date, in which case GPC's target closing date would be at the issuanceof its CO L which is expected in September 2011.* ESP and Limited Work Authorization (LWA) issued in September 2009.* Combined Construction and Operation License issued in September 2011* Construction and First Concrete - October 2011 for Unit 3 and October 2012for Unit 4* Fuel load, startup and testing - October 2015 for Unit 3 and October 2016 forUnit 4* VEGP Unit 3 Commercial Operation Date - April 1, 2016* VEGP Unit 4 Commercial Operation Date - April 1, 2017

Please see section B2 for a description of the design features.Potential legal or regulatory risk associated with VEGP Units 3 and 4:The AP1000 design has been certified through Revision 15 of the Design ControlDocument (DCD). Currently WEC is pursuing a specific set of changes to thecertified design through Revisions 16 and 17 to the DCD. The NRC has issued aschedule for the review and approval of Revision 16 that is compatible with theschedule for the review and approval of the VEGP COL. NR C has not ye t issued aschedule for the review and approval of DCD Rev. 17, which will be submitted byWestinghouse in September, 2008.GP C has attempted to mitigate the risk of delay in CO L licensing attributable to theapproval of design changes by requiring WEC to comply with NRC schedules and toachieve approval of the DCD changes on a schedule that supports issuance of theCOL by October 1, 2011.Risks associated with delays due to site specific issues, such as the suitability of thesite or environmental issues, have been mitigated by pursuit of an early site permit.The early site permit is expected to be issued in September 2009. GPC hasmitigated the risk of delay or adverse regulatory finding on this issue by producing ahigh-quality application that GP C believes demonstrates that the regulatoryrequirement is met. GPC believes the risk of a regulatory delay arising fromenvironmental issues has been significantly reduced by the receipt of the Final EISon August 13, 2008.The NRC will also exercise regulatory oversight over the finalization of the detaileddesign of the facility, the procurement of equipment and components, and theconstruction of the facility through its Construction Inspection Program (CIP).Utilizing the CIP, the NRC will ensure that the construction of the facility complieswith NRC requirements. The Company has attempted to mitigate the risk ofregulatory compliance issues during construction by requ iring the EPC contractor to



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.1 l(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

develop and utilize an NR C approved Quality Assurance Program that satisfies both10 C.F.R. Part 50, Appendix B and ASME NQA-1.The company is required to obtain an order from the GPSC certifying theconstruction of the new units. On August 1, 2008, the Company filed an applicationrequesting certification of Vogtle Units 3 and 4. The Georgia PSC is expected tocomplete its review and issue a decision in March 2009. GPC will no t proceed withthe Plant Vogtle Expansion Project unless a certification order is granted by theGeorgia PSC. See section D. 1 for a discussion regarding the certification processand recovery of costs related to the units.

2. Technology DescriptionAs described in the Executive Summary section, VEGP Units 3 and 4 will beconstructed pursuant to the EPC Agreement, which grants GP C all necessarytechnology licenses to construct and operate the new units.The Westinghouse AP1000 is a two-loop pressurized water reactor (PWR) that usesa simplified approach to safety. The AP1000 has a gross power rating of 3415megawatt thermal (MWt) and nominal ne t electric output of approximately 1,100megawatt electric (MWe). The standardized reactor design complies with theAdvanced Light Water Reactor Utility Requirements Document (URD). Additionally,the AP1000 received Final Design Approval from the NRC in September 2004, andDesign Certification in December 2005. The AP1000 is the first and only GenerationIII + reactor to receive such certification from the NRC. In May 2007, Westinghousesubmitted an application to amend the AP1000 Design Certification Document(Revision 16) and in February 2008, the NRC issued a letter to Westinghouse with aschedule that supports a Final Safety Evaluation Report (FSER) in March of 2010.Recently Westinghouse has indicated that it will submit Revision 17 in September2008.The simplified AP1000 plant design includes overall safety systems, normaloperating systems, the control room, construction techniques and instrumentationand controls. Th e AP1000 design is expected to save time with an acceleratedconstruction time period of 48 months, from the pouring of first concrete to theloading of fuel.The AP1000 PW R works on the simple concept that in the event of a design-basisaccident (such as a coolant pipe break), the plant is designed to achieve andmaintain safe shutdown conditions without any operator action and without the needfor AC power or pumps. Instead of relying on active components such as dieselgenerators and pumps, the AP1000 relies on the natural forces of gravity, naturalcirculation and compressed gases to keep the core and containment fromoverheating. Many active components are included in the AP1000, but aredesignated as non-safety related.Th e AP1000 meets the NRC deterministic-safety and probabilistic-risk criteria withlarge margins. Results of the Probabilistic Risk Assessment show a very low coredamage frequency (CDF) that is 1/100 of the CDF of currently operating plants and1/20 of the maximum CD F deemed acceptable for new advanced reactor design.



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.1 l(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.More information on the Westinghouse AP1000 design may be found athttp://www.westinghousenuclear.com/docs/AP1000_brochure.pdfUnder the EPC Agreement, the Owners and the Consortium have agreed to certainliquidated damages upon the Consortium's failure to comply with the schedule andperformance guarantees. The Owners and the Consortium also have agreed tocertain bonuses payable to the Consortium for early completion and unitperformance. The Consortium's liability to the Owners for schedule and performanceliquidated dam ages and warranty claims are subject to a cap.GPC believes the AP1000 to be a commercially viable technology. Several otherAP1000 units have been contracted for, including 4 units in China and 2 units inSouth Carolina. Additionally several other major electric utilities are contemplatingthe use at the AP1000 reactor design, including Duke Energy, Florida Power andLight, Progress Energy and the Tennessee Valley Authority. The interest in theAP1000 from so many sources demonstrates the technology's commercial viability.Th e Final Rule for the DOE Loan Guarantee Program (10 CFR Part 609) defines atechnology in general use as a technology that "has been installed in and is beingused in three or more commercial projects in the United States, in the same generalapplication as in the proposed project, and has been in operation in each suchcommercial project for a period of at least five years." No advanced nuclear reactorhas been constructed in the United States; therefore, the technology employed in theGPC Vogtle Expansion Project is not in general use.As GPC is not the owner of the AP1000 technology, GPC cannot ensure its furthercommercial availability; however, the GPC Vogtle Expansion Project's successfulcompletion will reduce the perceived risk of future project of a similar nature.Furthermore, obtaining loan guarantees may help GPC, and other SouthernCompany subsidiaries, in future efforts to develop additional nuclear units. A loanguarantee would improve credit metrics such that the Company could be betterassured of maintaining its financial strength. [REDACTED******************************************************************************************************************

*********]. Mitigating the rate impact of the GPC Vogtle Expansion Project will play animportant part in the development of future nuclear facilities for the Company. WithGPC projections showing a large need for new generation in the future, loanguarantees could go a long wa y to potentially helping the Company develop anothernuclear plant beyond the GPC Vogtle Expansion Project.

3. Project EligibilitySection 1703(a) of the Energy Policy Act of 2005 (EPAct) authorizes the Secretary ofthe DOE to make loan guarantees only for projects that:(1) avoid, reduce, or sequester air pollutants or anthropogenic emissions ofgreenhouse gases; and



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(0. This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.(2) employ new or significantly improved technologies as compared to commercialtechnologies in service in the United States at the time the guarantee is issued.The GP C Vogtle Expansion Project meets both criteria.A. Substantial Environmental BenefitsThe operation of a nuclear power plant to generate electricity does not generatecarbon dioxide (C02), sulfur dioxide (S02) or nitrous oxide emissions (NOx). SinceVEGP Units 3 and 4 will be nuclear units and produce no measurable emissions ofthese air pollutants of concern during facility operation, and are anticipated togenerate approximately 1,100 MW (net) per unit, the emissions from these nuclearunits may be compared to hypothetical emissions from alternative base loadgeneration plants which utilize coal or natural gas as fuel. A comparison ofanticipated air emissions from VEGP Units 3 and 4, as compared to predicted coal-and gas-fired generation sources for comparable electric generation capacity isinstructive in demonstrating the substantial air quality-related benefits associatedwith VEGP Units 3 and 4, including the avoidance of air pollutants or anthropogenicemissions of greenhouse gases.For VEGP Units 3 and 4, on a nuclear fuel cycle basis, i.e. including air emissionsassociated with the electric power in producing nuclear fuel, the NRC has estimatedthat the carbon dioxide emissions from VEGP Units 3 and 4 would be less than 0.82million metric tons (0.9 million tons). 1 In comparison, for the representativepulverized coal-fired plant, above, operating for 40 years, without factoring thecarbon dioxide emitted in coal mining and transportation to the facility, would beapproximately 289,469,002 metric tons.VEGP Units 3 and 4 would have diesel-powered generators for standby power, akinto diesel-electric train locomotive engines in size and output, and auxiliary powersystems. The NRC has noted that these support systems would be used on aninfrequent basis and air pollutants discharged would be permitted by the GeorgiaDepartment of Natural Resources. Typically, the NR C limits, through licenserequirements, the operation of the diesel generators except for testing andemergency power. The air emissions associated with this infrequent operation andtesting of this equipment and auxiliary power systems are small, and orders ofmagnitude less than emissions from gas or coal-fired alternatives. Emission data foravailable pollutants for VEGP Units 3 and 4 diesel and auxiliary equipment isprovided in the table below 2:

Draft NUREG-1872, Vol. 1, page 5-3 - 5-4, September, 2007, entitled "Draft EnvironmentalImpact Statement for an Early Site Permit (ESP) at the Vogtle Electric Generating Plant Site."2 Southern Nuclear, Early Site Permit Application, NR C Accession No. ML081020179, March, 2008Georgia Power Company CONFIDENTIAL AND PROPRIETARYSeptember 2008 14


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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

Table B3-1: Comparative Emissions DataPollutant Coal (tons/year) Natural Gas (tons/year) Nuclear (tons/year)NOx 1815 540


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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.

* Reactor safety functions achieved without safety-related Alternating Current(AC) electrical power* Automatic response to accident conditions (reduction in human operatoractions)* "Passive cooling" in accident conditions: natural circulation, condensationand evaporation "passive" safety functions for reactor core cooling (incontrast with active safety-related cooling systems in existing facilities)* Increased operating margin to safety limits* Actuation of reactor safety functions with "stored energy", includingcompressed gases (nitrogen, air) and batteries* Reduced reliance on safety-related pumps and use of natural ventilationsystems in the plant* Severe accident scenarios mitigated by in-vessel retention of affected fuel* Substantially fewer safety-related pumps, valves, Class 1 E AC sources,cabling, piping and other components, consequently, smaller total buildingvolume

4. OrganizationGPC, a wholly-owned subsidiary of Southern Company, is the Applicant and theproposed Borrower with respect to this Application. GPC will directly own theProject, which is GPC's 45.7% undivided ownership interest in VEGP Units 3 and 4.GPC will co-own VEGP Units 3 and 4 with three unaffiliated entities: OPC, MEAGand Dalton Utilities. GPC, or its agent, SNC will perform all environmental permittingand compliance activities necessary to obtain the authorizations to construct VEGPUnits 3 and 4.SNC, also a wholly-owned subsidiary of Southern Company, is the applicant for thecombined COL with the NRC and will construct and operate VEGP Units 3 and 4 onbehalf of the Owners.SCS, also a wholly-owned subsidiary of Southern Company, provides supportservices to affiliate companies in the Southern Company system, including GPC, andmay ac t as GPC's agent. SCS will provide a variety of support services during theProject, including assistance with the preparation of this Application.Georgia Power Company241 Ralph McGill Blvd. NEAtlanta, Georgia, 30308Taxpayer ID: 58-0257110Southern Nuclear Operating CompanyP.O. Box 129542Inverness CenterBirmingham, Alabama 35201



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

Ke y Project Personnel;Joseph A. (Buzz) Miller - SVP - Nuclear Development, SNCJoseph A. "Buzz" Miller is Senior Vice President of Nuclear Development forSouthern Nuclear Operating Company. Mr. Miller currently serves as President ofSouthern Nuclear Development, LLC and will coordinate Southern Company'sparticipation in NuStart, a consortium of utilities developing a Combined Constructionand Operating license for a new nuclear plant. He joined Alabama Power in 1986 asan engineer working in the chemistry and environmental support section of NuclearGeneration. Mr. Miller was assigned to Washington D.C. in 1993 as Federal Affairsmanager where he served one year at the Nuclear Energy Institute as acting vicepresident of Legislative Affairs. Mr. Miller's most recent position was vice presidentof Government Relations for Southern Company and managing the company'sWashington office staff and the company's efforts with the U.S. Congress andvarious Executive Branch agencies and officials. In 1998, Mr. Miller was selected toserve as assistant to Southern Company Chairman, President and CEO BillDahlberg. He returned to Washington in May 1999 after being elected vice presidentof Government Relations. Mr. Miller is a 1983 graduate of Auburn University, wherehe received a bachelor's of science degree in chemical engineering.James. H (Jim) Miller III - President and CEO, SNCJames H. "Jim" Miller III is president and chief executive officer of Southern NuclearOperating Company. Mr. Miller, currently serves as senior vice president, complianceofficer, and general counsel at GPC, and will assume the additional role as chairmanof Southern Nuclear on October 1, 2008. Mr. Miller joined Southern Company in1994 as corporate counsel for Southern Nuclear after achieving partner status withthe Birmingham, Alabama-based law firm of Balch and Bingham. Since then, he hasheld roles of increasing responsibility, including senior vice president, externalaffairs, Alabama Power, and senior vice president, Birmingham Division, AlabamaPower. Mr. Miller served as senior vice president, general counsel and assistantsecretary for Southern Company Generation and Southern Power where he hadresponsibility for legal issues surrounding the wholesale generation business, as wellas external issues relating to the operations of the power plants. Mr. Miller spentthree years in the U.S. Navy, reaching the rank of lieutenant commander in the U.S.Naval Reserve after earning a bachelor's degree in marketing from the University ofAlabama in 1971. Mr. Miller earned a Juris Doctorate from the University of Alabamain 1977, and is a graduate of the Advanced Management program at England'sOxford University and the Nuclear Reactor Technology course at the MassachusettsInstitute of Technology.Dale M. Lloyd - Vogtle Deployment Director, SNCDale Lloyd has 31 years of experience with Southern Company, and has heldvarious management positions throughout the engineering, generation, and nuclearorganizations. He worked at Plant Vogtle on the construction and projectmanagement staff for Vogtle Units 1 and 2 and was at the Vogtle site during the final



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.year of construction/startup, the first fuel cycle and the first refueling outage. Mr.Lloyd previously was General Manager of New Generation Projects in Engineeringand Construction Services, supporting the development, design, procurement, andconstruction of new generating facilities fo r Southern Company. In 2006 he wasnamed as Vogtle 3 and 4 Deployment Director and is responsible for managing theEPC contract negotiations, developing a project and construction managementorganization, managing project licensing activities, and planning for futureconstruction activities for new units that may be built at the Vogtle site.Oscar C. Harper, IV - VP - Nuclear Development, GP COscar Harper is the Vice President of Resource Planning and Nuclear Developmentfor GPC. His organization is responsible for economic evaluations of demand sideprograms, forecasting energy load growth, and acquiring resources to meet thecurrent and future energy needs of GPC's customers. These responsibilities alsoinclude oversight of GPC's Integrated Resource Planning Process. This is a longterm analysis of generation, transmission, and environmental plans filed andoverseen by the Georgia Public Service Commission on a three year continual basis.Mr. Harper joined GP C in 1984 serving in Marketing, Power Delivery, CompetitiveGeneration, and Regulatory Affairs prior to his current position.Michael D. Garrett - President and CEO, GPCMichael D. Garrett is president and CEO of GPC, the largest subsidiary of SouthernCompany, one of the nation's leading generators of electricity. Mr. Garrett, a Georgianative, began his Southern Company career in 1968 at GPC. Prior to being namedpresident and CEO of GPC, he was president and CEO of Mississippi Power. Beforeheading Mississippi Power, Mr. Garrett was an executive vice president at AlabamaPower with responsibility for Customer Operations and Regulatory Affairs. Mr.Garrett also held Alabama Power positions as vice president of Finance; Birminghamdivision vice president; senior vice president of External Affairs and executive vicepresident of External Affairs.Cliff Thrasher - Executive Vice President, CFO an d Treasurer, GPCCliff Thrasher is Executive Vice President, CFO and Treasurer for GPC. In hi scurrent role, Mr. Thrasher has responsibility for GPC's accounting and financialactivities and structure. Mr. Thrasher has over 30 years of experience with SouthernCompany and its affiliates. Mr. Thrasher began his career with GPC Company in1970 as an accounting clerk in the Invoice Accounting department. In 1974, hebecame responsible for maintaining the general ledger and preparing financialstatements. From 1979 to 1985, he served as Accounting Research Manager. In1985, Mr. Thrasher became Manager of Cost Accounting and Accounting Research.The following year Mr. Thrasher was promoted to Regulatory Accounting Managerwith responsibility for preparing GPC's 1987 rate case. That same year Mr. Thrasherwas elected Assistant Comptroller. In 1995, he was named Vice President andComptroller of GPC. Before assuming his current position, he served as Vice



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(0. This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

INPO Performance Index2008 Calculation100

95908580o-4-75706560 -55

55------------------------- ----------------------------- N---N--

Southern Nuclear Quarterly

The INPO Performance Index is a composite of ten INPO Performance Indicatorsand is considered by INPO to be an overall indication of plant safety andperformance.GPC has prior experience with nuclear projects through its involvement in VEGPUnits 1 and 2. Additionally, GP C has experience owning and operating 48 otherelectric generating plants and is one of the largest electric utilities in theSoutheastern United States.For the last decade Southern Company and SCS have managed one of the largestgeneration and environmental control construction programs in the United States.Attached as Appendix B.1 is a presentation describing that program. Thepresentation demonstrates Southern Company's ability to manage large projects,complete them on time and under budget, secure necessary permits and find largenumbers of staff to construct the projects. While the Consortium is responsible forlabor procurement under the EPC, GPC's knowledge of southeastern labor marketsshould prove valuable.Please see Sections A.6 for a description of the prior experience of other projectparticipants.

6. Project Sponsor's CapabilitiesGPC, a Southern Company subsidiary, is vertically integrated utility providingelectricity to regulated retail customers in Georgia and wholesale customers withinthe southeastern United States. GP C is regulated by the GPSC and the FERC and



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currently owns and operates 49 existing coal-fired, nuclear, combined-cycle,combustion turbine, and hydroelectric facilities within the State of Georgia.GPC's financial strength is demonstrated by its senior unsecured credit ratings of A,A2 and A+ by Standard and Poor's, Moody's Investor Service and Fitch Ratings, aswell as the Company's history of continuously maintaining investment grade ratingsfrom both S&P and Moody's since the 1940s. Financial strength is furtherdemonstrated by GPC's $22 billion balance sheet (as of 6/30/08). So long asreasonable cost recovery is allowed by the GPSC, GPC anticipates continuingfinancial support for the GPC Vogtle Expansion Project. GPC's investment in theProject to date includes site evaluation work, as well as preparation of severalregulatory filings, including the COLA and GPSC certification filings. This investmenttotaled $36.7 million through June 30 , 2008.Strategically, the GPC Vogtle Expansion Project provides a number of benefits forGPC. Th e Project provides much needed fuel diversity, and helps to lessen GPC'sdependence on volatile natural gas prices. It further provides a CO2-free baseloadgenerating resource, which will be invaluable in what is likely to be a carbon-constrained future. GPC's investment in the Project to date, in both dollars andmanpower, should demonstrate the strategic significance of the Project to theCompany.

7. Proposed Project LocationAs shown in Appendix C, the 3,169-acre VEGP site is located on a coastal plain bluffon the southwest side of the Savannah River in eastern Burke County, Georgia. Thesite is approximately 30 river miles above the U.S. 301 Bridge and directly across theriver from the DOE's Savannah River Site (Barnwell County, South Carolina). TheVEGP site is approximately 15 miles east-northeast of Waynesboro, Georgia and 26miles southeast of Augusta, Georgia. It is also about 100 miles from Savannah,Georgia and 150 river miles from the mouth of the Savannah River. VEGP Units 1and 2 are also located on this site.Locating the proposed additional nuclear units on an existing nuclear site will bebeneficial because this existing site already has an infrastructure in place to supportnuclear power generation. Other key advantages of locating additional nuclear unitsat the VEGP site are as follows:

* Existing VEGP Units 1 and 2 site-related analysis and operating recordswere available as inputs for development of various sections of the ESP.* The VEGP site and its exclusion area previously underwent a screening andevaluation process establishing its suitability, including a NationalEnvironmental Policy Act (NEPA) evaluation of alternatives. The proposedadditional nuclear units are located within the existing VEGP site exclusionarea boundary (site property boundary).* Programs, procedures and arrangements have been established, and are in-place, with state and local government agencies, covering emergencyplanning, discharge permits, etc.



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* Liaisons with the local community are already established.SNC is the licensed operator of the existing generating facilities at the VEGP site,with control of the existing facilities, including complete authority to regulate any andall access and activity within the plan exclusion area boundary, and authority to actas the agent of the Owners.

8. State and Local SupportPlease see Section D.1 of this application for a summary of the provisions of Georgialaw regarding the construction of new electric generating units for inclusion in therate base and the recovery of costs related to those units.GPSC approval and the items listed in Item 11 - List and Status ofLicenses/Permits/Approvals - are required for this project to move forward.Additional support for this Project is shown in the form of letters from U.S. SenatorJohnny Isakson, Georgia State Senator Bill Heath, and Georgia StateRepresentatives Jim Marshall, Paul Brown, and Glenn Richardson. TheWaynesboro City Council, Sylvania City Council, Augusta Metro Chamber ofCommerce, Board of Commissioners of Burke County, Burke County Chamber ofCommerce, and Screven County Board of Commissioners have al l issued support ofthe Vogtle Expansion Project. These letters and resolutions were provided at ASLBmeetings and can be provided upon request.To date no state or local financial incentives have been announced for the GP CVogtle Expansion Project.

9. Project Time LinesThe VEGP Units 3 and 4 Key Milestone Schedule is provided in Appendix D.

10 . Key Material ComponentsBelow are the key material components of the GPC Vogtle Expansion Project.WaterThe site of the proposed new units is located on the banks of the Savannah River,which forms the boundary between the states of Georgia and South Carolina. GPCplans to withdraw water from the Savannah River pursuant to a permit from theGeorgia Department of Natural Resources for the purpose of the circulatingwater/turbine cooling system, where river water will be used to replace cooling towerevaporative losses, drift losses and blowdown discharge. The service water systemmakeup, potable water system, demineralized water system, fire protection systemand miscellaneous uses will be supplied by groundwater from two 1,500 gallon perminute wells to be installed in the Cretaceous aquifer on the site. GPC believes that,subject to obtaining required water use permits, adequate supplies of water arereadily available from the sources listed for the respective uses and that the risk thatwater supplies will be inadequate to construct and operate the proposed new units isminimal.



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.Construction MaterialsGPC has entered into an Engineering, Procurement and Construction (EPC)Agreement with a Consortium comprised of WEC and S&W pursuant to which theConsortium is to supply all construction materials. WEC is a leading supplier ofnuclear plant products and technologies to utilities throughout the world. S&W is aleading global provider of EPC contracts. S&W's assets were acquired by Shaw,which is a leading global provider of technology, engineering, procurement,construction, maintenance, fabrication, manufacturing, consulting, remediation andfacilities management services for government and private sector clients in theenergy, chemicals, environmental, infrastructure and emergency response markets.In the event the Consortium fails to deliver adequate construction materials, GPC'sremedies are those specified under the EPC Agreement. While GPC recognizes thatthe world-wide demand for commodities, including construction materials and fuel,has from time-to-time placed upward pressure on the prices for such materials, GPCdoes not believe that there is a significant risk that adequate construction materialscannot be supplied for the proposed new units on a timely basis.Site AccessThe proposed new units are to be located on the site of Vogtle Electric GeneratingPlant Units One and Two, which is owned by GPC in common with each its Co-Owners of which have also executed a development agreement with GPC relative tothe proposed new units. Pursuant to the development agreement, GPC has the rightto access the site and construct the proposed new units. The site itself can beaccessed through U.S. Route 25; Georgia State Routes 23, 24, 56 and 80; and NewRiver Road. A navigation channel is authorized on the Savannah River from the Portof Savannah to Augusta, Georgia and a railroad spur connects the site to the NorfolkSouthern Savannah-to-Augusta track.Power Distribution InfrastructureGPC and the Co-Owners own and maintain the power delivery systems in the stateof Georgia. Pursuant to agreements regarding access to those systems and itsfranchises granted by the Georgia Public Service Commission, GPC has the right touse existing power distribution infrastructure and to construct such additionalfacilities as are necessary to obtain electric power for and to market the output fromthe proposed new units. The site isconnected to the regional power grid via two500-kV transmission lines and four 230-kV transmission lines in four rights-of-way.The transmission lines are operated by GPC. One new 500-kV transmission linewould be constructed to handle the power generated by the proposed new units.The proposed new transmission line would be routed from the site to the Thomson-Vogtle substation west of Augusta, Georgia.FuelThe market for nuclear material, conversion and enrichment is international andGPC's agent for the operation of the proposed new units, SNC, has extensivecontacts and contractual relationships with suppliers of nuclear fuel and services. Adesign and fabrication contract for the initial reactor core for the proposed new unitsis nearing completion with WEC. SNC will act on an appropriate schedule to secure



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DO E,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.nuclear fuel for the proposed units. GPC believes the risk that adequate supplies ofnuclear fuel for the proposed new units will not be available is minimal.

11. List and Status of Licenses/Permits/ApprovalsAppendix E is a list of federal, state and local licenses, permits and approvalsrequired for completion of VEGP Units 3 and 4. Key milestone dates associated withthe COLA and the ESP are listed in the Executive Summary section. Anticipatedapproval dates for each of the items listed in Appendix E will be provided at a laterdate.

12. Detailed Total Project CostGPC projects a total in-service cost of approximately $6.9 billion for the GPC VogtleExpansion Project, subject to adjustments as described below. This cost includesGPC's share of the capital cost for both units as well as the initial fuel load andcertain transmission system network improvements which are necessary,reasonable, customary, and directly related to the startup of the Project. This costreflects GPC's 45.7% undivided ownership interest of the proposed VEGP Units 3and 4 and is based upon the projected costs for these units that include escalation inaccordance with the price adjustment provisions of the EPC Agreement, as well asthose construction, management and interconnection costs that are the responsibilityof the Owners. The indexed portion of these costs will be adjusted in accordancewith their compounding periods throughout the construction of the units.[REDACTED*************************************************************** ******

13. Loan Guarantee ImpactShould the GPC Vogtle Expansion Project be awarded DOE Loan Guarantees, theimpact on such project's finances are estimated as follows:Interest Rate[REDACTED************************************************** *******

**********************************************************************************************]

Debt Term[REDACTED*******************************************************************************

Overall Financial Debt StructureGeorgia Power Company CONFIDENTIAL AND PROPRIETARYSeptember 2008 24


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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in

5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(0. This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC Vogtle

Expansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.

[REDAC TED ******************************************************************************

[RE D*ACT ED**********************************************************************



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.

Section C: Technical Information1. Key Contracts and Agreements

A. Engineering Procurement Construction (EPC) ContractOn April 8, 2008, Georgia Power, acting for itself and as agent for the Co-Owners,and the Consortium entered into the EPC Agreement to design, engineer, procure,construct, and test two AP1000 nuclear units with electric generating capacity ofapproximately 1,100 MW s each and related facilities, structures, and improvementsat the VEGP.The EPC Agreement is an arrangement whereby the Consortium supplies andconstructs the entire facility with the exception of certain items provided by theOwners. Under the terms of the EPC Agreement, the Owners will pay a purchaseprice that will be subject to certain price escalation and adjustments, adjustments forchange orders, and performance bonuses. Each Owner is severally (and not jointly)liable for its proportionate share, based on its ownership interest, of all amountsowed to the Consortium under the EPC Agreement. GPC's proportionate share,based on its current ownership interest, is 45.7%.If certified by the Georgia PSC and licensed by the NRC, VEGP Units 3 and 4 arescheduled to be placed in service in 2016 and 2017, respectively. The total plantvalue to be placed in service will also include financing costs for each of the Owners,the impacts of inflation on commodity costs, transmission, and other costs that arethe responsibility of the Owners. GPC's proportionate share of the estimated costs,based on its current ownership interest, is approximately $6.4 billion, subject toadjustments and performance bonuses.under the EPC Agreement. The plant valueto be certified by the GPC excludes certain other Loan Guarantee eligible costs,[REDACTED******************************************************].Th e Owners and the Consortium have agreed to certain liquidated damages uponthe Consortium's failure to comply with the schedule and performance guarantees.The Owners and the Consortium also have agreed to certain bonuses payable to theConsortium for early completion and unit performance. The Consortium's liability tothe Owners for schedule and performance liquidated damages and warranty claimsis subject to a cap.B. Long Lead ProcurementsSNC and GPC previously entered into an agreement with Westinghouse to providefor long lead material components prior to Georgia Public Service CommissioncertificationC. Fuel Supply AgreementsWhile GPC is actively working towards the completion of a fuel supply agreement, noagreement has been signed to date.



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

D. Operations and Maintenance (O&M) ContractsPursuant to the Amended and Restated Operating Agreement for Plant Vogtle, theCo-Owners have appointed GPC as the agent with authority over the operation andmaintenance of VEGP Units 3 and 4 (as well as the existing units) at VEGP.Pursuant to the Amended and Restated Nuclear Operating Agreement between GPCand SNC, GPC has delegated to SNC the authority to provide all nuclear operatingservices (particularly all things required to be done by the licensed operator) forVEGP Units 3 and 4 (as well as the existing units) since SNC will be the licensedoperator of VEGP Units 3 and 4.E. OtherDesignation of SNC as AgentGPC has designated SNC as its agent to perform licensing, quality assurance andconstruction oversight for the GP C Vogtle Expansion Project. SNC will ac t as thelicensed constructor under the CO L and the licensed operator upon the completionof the GPC Vogtle Expansion Project.Joint Ownership AgreementTh e Ownership Agreement governs the ownership rights and responsibilities of theCo-Owners of VEGP Units 3 and 4 and the authority and responsibilities of GPC asAgent for the Co-Owners with respect to the development, licensing and constructionof VEGP Units 3 and 4 and any future capital additions or modifications to VEGPUnits 3 and 4.Agent's ResponsibilitiesUnder the Ownership Agreement, OPC, MEAG and Dalton have appointed GPC astheir agent (the "Agen't), with sole authority and responsibility for the planning,licensing, design, construction, acquisition, completion, startup, commissioning,renewal, addition, replacement, modification and decommissioning of VEGP Units 3and 4. The Agent is required to discharge its responsibilities in a manner consistentwith Prudent Utility Practice. Neither the Agent nor any Co-Owner may make anadverse distinction between VEGP Units 3 and 4 or any other generating unit inwhich the Agent or such Co-Owner has an interest because of the Co-Ownership ofVEGP Units 3 and 4 with the other Co-Owners.Ownership RightsGPC, OPC, MEAG and Dalton have made elections for the following ownershippercentages: GPC - 45.7%, OP C - 30%, MEAG - 22.7% and Dalton - 1.6%pursuant to the Plant Vogtle Owners Agreement Authorizing Development,Construction, Licensing and Operation of Additional Generating Units, dated as ofMay 13, 2005, among the Co-Owners, as amended (the "Development Agreement").Under the Development Agreement, each Co-Owner will have one last opportunity(as provided therein) to reduce its participation in VEGP Units 3 and 4, and the other



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,

except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

Co-Owners may proportionately increase their ownership interests by the percentagereduced. 4Each Co-Owner will own its respective ownership interest in VEGP Unit 3 or 4 as atenant in common with the other Co-Owners. A tenancy in common is an ownershipstructure in which all parties to the tenancy have the right to equal access and use ofthe entirety of the property. The ownership interest includes a fee simple interest inVEGP Units 3 and 4 and the site inside the existing boundaries of Plant Vogtle whereVEGP Units 3 and 4 will be located, as well as easement rights to access theexisting Plant Vogtle property and rights to use common facilities currently existing atPlant Vogtle. Each Co-Owner may convey liens and security interests in itsrespective ownership interest to secure its indebtedness. OPC's ownership interestwill be subject to the lien of its Indenture. The other Co-Owners do not currentlyanticipate a lien on their respective ownership interests other than in connection witha DO E loan guarantee. Additionally, the Co-Owners have waived their right (a) to apartition or any accounting thereof related to VEGP Units 3 and 4 and (b) to anyequitable lien rights.With limited exceptions, the Co-Owners may not otherwise sell or transfer all or anyportion of their interest in either or both of VEGP Units 3 and 4 without first offeringsuch interest to the other Co-Owners. This right of first refusal may be waived by avote of Co-Owners holding an aggregate of 90% of the ownership interests. Theexceptions include sales or transfers:

(a)Used to finance the discharge of nuclear fuel payment obligations;(b)To a governmental authority in connection with financing a pollution controlfacility;(c)Made to convey a security interest to secure bonds; or(d)To allow a Co-Owner to sell its Ownership Interests when it does not wishto repair a damaged VEGP Unit 3 or 4 but the remaining Co-Owners do.

In addition, the Ownership Agreement allows the Trustee under OPC's Indenture todispose of OPC's ownership interest, without complying with the right of first refusal,if OPC defaults under its indenture and an agency or instrumentality of the UnitedStates government holds debt that is secured by the Indenture. In such event, thetrustee of OPC's Indenture is required to allow the other Co-Owners to offer topurchase OPC's ownership interest but may reject such offers. The trustee alsomust permit the other Co-Owners to participate in any other auction or bid processrelated to the ownership interest.

4 Under the Development Agreement, each Co-Owner may reduce its ownership percentage prior to the date of the"Major Milestone", which will occur on December 1, 2008, subject to extension as provided in the DevelopmentAgreement. If a Co-Owner elects to reduce its ownership percentage prior to the Major Milestone, the Co-Owner willforfeit its investment in the percentage ownership interest that is given up and will have no further obligations withrespect to that percentage ownership interest. The other Co-Owners would then have the option to increase theirpercentage ownership interests by their respective pro rata shares of the ownership interest that is given up.Georgia Power Company CONFIDENTIAL AND PROPRIETARYSeptember 2008 28


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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.

Damage or DestructionIf either VEGP Unit 3 or 4 is damaged or destroyed, and the cost of repairing orrebuilding the unit (less any deductible) is estimated to be covered by insurance,then the unit will be repaired or rebuilt unless the Co-Owners decide, by a vote ofthe Co-Owners holding an aggregate of 90% of the ownership interests in such unit,not to repair or rebuild such unit (in which event the Co-Owners desiring to repair orrebuild the unit may buy out the Co-Owners who do not want to participate in therepair or reconstruction).Conversely, if the cost of repairing or rebuilding the unit (less any deductible) is notstimated to be covered by insurance, then the unit will no t be repaired or rebuiltunless (1) the Co-Owners decide, by a vote of Co-Owners holding an aggregate of90% of the ownership interests in such unit, to repair or rebuild such unit, or (2) oneor more Co-Owners desiring to repair or rebuild the unit buy ou t any Co-Ownerswho do not want the unit repaired or rebuilt.InsuranceThe Agent must carry at all times, in the names of the Co-Owners and as theirinterests may appear, builder's risk (including transit risk, if applicable) or installationfloater insurance of the "all risks" type, covering such hazards as the Agent deemsappropriate consistent with its customary practices and Prudent Utility Practice.The cost of such insurance is included as a Cost of Construction.In addition, each Co-Owner may maintain, at its sole cost and expense, suchadditional or other insurance policies as it deems necessary or advisable to protectits interests, provided such additional insurance does not reduce or diminish theinsurance coverage maintained by the Agent.The Agent must reasonably satisfy itself that all contractors, subcontractors,engineers, suppliers and manufacturers associated with VEGP Units 3 and 4 carryappropriate insurance (for workers' compensation, public liability, automobile liabilityand such other hazards as the Agent deems appropriate), which insurance mustprotect the Co-Owners to the same extent as the Agent. Similarly, the Agent willrequire that all contracts with third parties relating to VEGP Units 3 and 4 providethe same protection for the Co-Owners as for the Agent, including indemnificationobligations.Project Management BoardThe development, licensing and construction of VEGP Units 3 and 4 will bemanaged and supervised by a Project Management Board ("PMB"), which will becomprised of senior executives from GPC and its Affiliates. The PMB is intended toserve as the highly integrated senior management oversight board that will makemajor project decisions fo r the Agent and will provide a forum for the review anddiscussion of Relevant Information. Additionally, the PMB shall establish and



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.

monitor construction schedules and provide a venue for review and discussion ofconstruction budgets.The Co-Owners, through their Designated Representatives, (i) ma y attend allmeetings of the PMB and (ii) will be provided with information and reports regardingVEGP Units 3 and 4 at the same time such information and reports are provided tothe PMB members.Information and Audit RightsThe Agent will provide the Co-Owners with access to information relevant to thedevelopment, licensing, construction and ownership of VEGP Units 3 and 4. To theextent practicable and cost-effective, the Agent will provide access to suchinformation electronically.The Agent will also provide monthly status reports to the Co-Owners duringconstruction of VEGP Units 3 and 4. If supplemental meetings are held for majorproject decisions, the Agent will distribute supplemental reports with respect to suchdecisions.During construction of VEGP Units 3 and 4, there will be an annual review of thePM B and information flow process to determine whether it is adequate for the Co-Owners' needs. Dissatisfied Co-Owners may appeal to the PMB, and if the Co-Owner remains dissatisfied the CEO of the Co-Owner may discuss the issues withthe CEO of the Agent.The Co-Owners have the right to conduct management audits of the Agent'sperformance, at their own expense. Management audit rights include the right ofaccess to, subject to applicable regulations of the Nuclear Regulatory Commissionand vendor requirements, architectural, engineering and design drawings andspecifications, contracts, books, records, reports or other documents relating toVEGP Units 3 and 4. The Co-Owners also have the right to conduct cost audits, attheir own expense, with access to books, records, contracts and other documentsrelated to the Agent's performance which se t forth (1) costs applicable to the Cost ofConstruction, Fuel Costs and other costs for each VEGP Unit 3 or 4 to the extentnecessary to enable the auditors to verify that the costs have been properly billed tothe Agent or to the auditing Co-Owner, and (2) matters relating to the planning,licensing, design, construction, acquisition, completion, start up, commissioning,renewal, addition, replacement, modification and Decommissioning of either VEGPUnit 3 or 4 in proceedings before any governmental au thority having jurisdiction.Site RepresentativesEach Co-Owner will have the right to have one site representative for each of VEGPUnits 3 and 4 at all reasonable times to observe the Agent's performance of itsresponsibilities under the Agreement. Additional construction site representativesmay also be requested by a Co-Owner, and the Agent may not unreasonably denysuch requests.



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.1 l(f). This information shall no t be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GPC VogtleExpansion Loan Guarantee Application. DOE and other required reviewers shall use the information only for purposes of review andevaluation.Payments and Billing DisputesThe Co-Owners will be responsible for the Cost of Construction (as well as CapitalCosts and Fuel Cost after Commercial Operation) of VEGP Units 3 and 4 inproportion to their respective Ownership Interest in such unit. Each party pays itsownership percentage share of the actual costs; no agency fee or risk premium ispaid to the Agent.The Co-Owners will be invoiced monthly by the Agent based on the Cost ofConstruction anticipated to be incurred in the succeeding month.In subsequent invoices, the Agent will provide an accounting to the Co-Owners ofCosts of Construction incurred and credits for previous months and makeappropriate adjustments to amounts invoiced to the Co-Owners. The Co-Ownersand their representatives have the right to audit the Agent's books and records todetermine the propriety of costs allocated to the Co-Owners. The Co-Owners maycontest and audit (1) costs incurred prior to commercial operation of VEGP Unit 3 or4 at any time up to 180 days following commercial operation (o r 180 days followingreceipt of the Agent's accounting of such costs, if later), and (2) costs incurred aftercommercial operation at any time up to 180 days following receipt from the Agent ofan accounting of such costs (interpreted as provided in the Ownership Agreement).RemediesFor Non-PaymentIn the event of a payment default by a Co-Owner, the defaulting Co-Owner will notbe entitled to receive any output of capacity or energy from either of VEGP Units 3and 4, or to exercise any other right of a Co-Owner under the Agreement, until alloverdue amounts have been paid, together with interest at a rate equal to the PrimeRate plus five percentage points (5%).Both before and after commercial operation, any non-defaulting Co-Owner may,with notice to the other Co-Owners, pay amounts owed by a defaulting Co-Owner.Such paying Co-Owner will have the right to be reimbursed by the defaulting Co-Owner, together with interest, and, after commercial operation, will also be entitledto a corresponding portion of the defaulting Co-Owner's output of VEGP Units 3 and4 until reimbursed (the paying Co-Owner must also pay the defaulting Co-Owner'spro rata share of Operating Costs and Fuel Costs).If the payment default is with respect to costs incurred prior to commercial operationand such default lasts for one year or more, then each Co-Owner may elect either(1) to purchase the defaulting Co-Owner's interest in VEGP Units 3 and 4 (inproportion to its ownership interest), or (2) to invest additional funds in VEGP Units3 and 4 and have the ownership interests of the Co-Owners adjusted to reflect suchamounts invested.



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GPC Vogtle Expansion Project DOE Loan Guarantee ApplicationThis page contains confidential trade secret and proprietary information that meets the criteria for protection from public disclosure in5 U.S.C. 552(b)(4), 18 U.S.C. 1905, and 10 C.F.R. 1004.11(f). This information shall not be released to persons outside DOE,except for persons in other United States Federal Government agencies whose review is required for approval of the GP C VogtleExpansion Loan Guarantee Application. DO E and other required reviewers shall use the information only for purposes of review andevaluation.Th e Agent will be entitled to sell the defaulting Co-Owner's right to output fromVEGP Units 3 and 4 until all overdue amounts owed by the defaulting Co-Ownerhave been paid, together with interest. The net proceeds from an y such sale will beapplied to reduce the liability of the defaulting Co-Owner, and any excess netproceeds will be applied as a credit against the defaulting Co-Owner's share offuture costs under the Ownership Agreement.A non-defaulting Co-Owner may also loan funds to the defaulting Co-Owner at areasonable rate of interest, and may, at its option, receive an appropriate portion ofthe defaulting Co-Owner's output of VEGP Units 3 and 4.In the event a Co-Owner defaults on any payments owed in connection withfinancing its ownership interest in VEGP Units 3 and 4, any other Co-Owner willhave the option to pay such overdue amounts directly to the defaulting Co-Owner'slender and will be entitled to be reimbursed for any such payments by the defaultingCo-Owner, together with interest.The Co-Owners' rights with respect to non-payment are covenants running with theland and binding on the Co-Owners' successors in title.Fo r Other BreachesIf GPC fails to perform its obligations as Agent in a manner consistent with PrudentUtility Practice, the other Co-Owners may, as their sole remedy, remove GP C asAgent. In addition, if the Agent makes an adverse distinction between VEGP Units3 and 4 and any other generating unit in which it has an interest because of its Co-Ownership of VEGP Units 3 and 4 with the other Co-Owners, as discussed above,or takes any action by which it intends to put another Co-Owner at a disadvantage,then the Co-Owners may also pursue any remedy available to them at law or equity.Other remedies available to Co-Owners include the right to sue any non-payingparty to enforce payment obligations and recover increased costs incurred as aresult of the non-payment, rights of set-off, rights to seek declaratory judgments,and as noted above, the right to seek injunctive relief to enforce the Agent'sobligations to provide information.

OperatingAgreementThe Operating Agreement will govern the rights and responsibilities of GeorgiaPower, Oglethorpe, MEAG and Dalton as Co-Owners, and the authority andresponsibilities of Georgia Power as Agent for the Co-Owners, with respect to themanagement, operation and maintenance of VEGP Unit 3 or 4 following CommercialOperation. The Operating Agreement

Ga Power Company Application Part 1

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Transcript of Ga Power Company Application Part 1