Fitch Ratings has assigned a ‘BBB+’ rating to Georgia Power Company’s $750 million series 2023A 4.65% senior notes due May 16, 2028 and $1.0 billion series 2023B 4.95% senior notes due May 17, 2033. Georgia Power intends to use the net proceeds from these issuances to repay $200 million outstanding under an uncommitted credit facility, repay all or a portion of its CP borrowings and for general corporate purposes.
The Issuer Default Rating (IDR) for Georgia Power is ‘BBB’ with a Stable Rating Outlook. The ratings reflect stable and predictable cash flow generation of Georgia Power’s regulated electric utility operations, constructive regulation in Georgia and robust growth across its service territory. The ratings also capture the still elevated, albeit diminishing, execution risks regarding the construction and testing of Vogtle 3 and 4 nuclear units. Vogtle 3 unit is expected to enter in-service in the second quarter of 2023 and Unit before then end of the first quarter of 2024.
KEY RATING DRIVERS
Vogtle Construction Execution Risk: The execution risks associated with the construction and testing of Vogtle 3 and 4 nuclear units continue to remain high, albeit these risks are abating as Unit 3 undergoes start up and commissioning activities preparing to commence operations in May or June of 2023. Unit 4 is expected to be operational in late 4Q23 or 1Q24. The availability of craft labor at Unit 4, construction productivity and outcomes of testing activities remain key to keep the schedule on track.
The capital costs to complete the two units is currently $10.6 billion, which is above the $7.3 billion costs deemed reasonable per a prior order by the Georgia Public Service Commission (PSC). The prudency proceeding on cost recovery will commence during Unit 4 fuel load. A further delay in the in-service dates could result in additional capital costs of approximately $15 million per month for Unit 3, and approximately $35 million per month for Unit 4, as well as…
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