Coronavirus forces Georgia Power to cut workforce on new reactors

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A day after saying enhanced safety protocols were in place to help prevent the spread of the novel coronavirus, Georgia Power Co. announced it has reduced the workforce by 20% at the Plant Vogtle nuclear reactor construction site.

Reducing the number of workers building the two new nuclear reactors is a "mitigating action" intended to address the impact of COVID-19 and the challenges with labor productivity exacerbated by the spreading virus, GPC said in an 8-K unscheduled material event filing with the Securities and Exchange Commission Thursday. GPC is a subsidiary of Southern Co.

Georgia Power Co. said it is cutting the workforce at Plant Vogtle to mitigate the spread of the coronavirus that causes COVID-19.

"The workforce levels resulting from this reduction are expected to last into the summer as Georgia Power continues to monitor the impacts of COVID-19 on the project," the 8-K notice said. "Georgia Power’s proportionate share of the incremental cost of this mitigation action is currently estimated to total $15 million to $30 million, assuming absenteeism rates normalize and the intended productivity efficiencies are realized in the coming months."

GPC owns 45.7% of the nearly $3 billion reactor project, while three public power agencies hold a majority interest. Those are Oglethorpe Power Corp. with 30%, Municipal Electric Authority of Georgia with 22.7% and Dalton Utilities with 1.6% of the ownership.

Georgia Power said it currently doesn't expect the reduced workforce to affect total project cost or the ability to achieve the regulatory-approved in-service dates of November 2021 for Unit 3 and November 2022 for Unit 4.

On Thursday, GPC reported that 42 workers had tested positive for the virus, up from 35 the day before. The investor owned utility also said the company is waiting on 57 test results, while 154 workers had tested negative for the virus that causes COVID-19.

The Georgia Department of Health reported Thursday that statewide 15,669 people tested positive, 3,108 were hospitalized, and 587 people had died. Across the country, 641,166 people have been sickened and 31,590 people have died, according to the Johns Hopkins coronavirus world tracker.

S&P Global Ratings said Thursday that its negative outlooks on Southern Co.’s A-minus and A-2 ratings, and the ratings of its subsidiaries will remain unchanged as a result of the workforce cutback at Plant Vogtle.

“While we expect the financial impact of this reduction to be manageable, it represents a setback for the company and heightens both its project execution and construction risk, which is reflected in our negative outlook,” S&P analysts said. “Specifically, the outlook incorporates the potential that missed productivity targets and an inability to attract skilled workers could lead to material cost overruns.”

At Plant Vogtle, GPC had more than 9,000 workers on site. With 1,800 fewer employees, the company said the reduction is "expected to provide operational efficiencies by increasing productivity of the remaining workforce and reducing workforce fatigue and absenteeism.

"It is also expected to allow for increased social distancing by the workforce and facilitate compliance with the latest recommendations from the Centers for Disease Control and Prevention," the market notice said. "The ultimate outcome of these matters cannot be determined at this time."

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