The majority owners of Georgia Power’s troubled Vogtle 3 and 4 nuclear construction venture have sued Georgia Power for some $700 million, claiming that the lead utility on the $30 billion two-unit, 2,200-MW plant has violated a contract designed to limit additional costs being passed to the two public power systems that together own 52.7%.
Oglethorpe Power (30% owners) and Municipal Energy Agency of Georgia (MEAG, 22.7 %) filed suit in state court in Atlanta. The Associated Press reported, “If Oglethorpe and MEAG win, it could hold down bills for the millions of customers of electric cooperatives and municipal utilities in Georgia, as well as for customers of JEA, the municipal utility in Jacksonville, Florida, and for some Alabama cooperative and municipal utility customers.”
A loss for Georgia Power would mean, according to the AP, “the shareholders of its parent, Atlanta-based Southern Co., would most likely have to absorb more losses. The company has said it’s unlikely that its regulator, the Georgia Public Service Commission, will let Georgia Power charge customers above a certain amount for Vogtle.”
The troubled project, vastly over budget and off multiple schedule changes, most recently said it now expects to start the units sometime in 2023. When the project began construction in 2009, the schedule for commercial operation was 2014. The initial cost estimate was $14 billion, with the Southern Co.’s exposure at $6 billion, and the Georgia public power systems responsible for the rest.
The Vogtle project is the only nuclear power construction in the U.S., with no others currently on the horizon.
Oglethorpe is a statewide generation and transmission system that serves the state’s rural electric cooperatives. MEAG is a joint action agency providing wholesale power to the state’s municipal retail distribution utilities.
In the June 18 filing in Fulton County Superior Court, Oglethorpe said, “Despite its solemn, written promise to accept increased responsibility for cost overruns over the threshold, Georgia Power has quite simply reneged. The time has come for Georgia Power to honor its agreement.”
In 2018 – following the bankruptcy of prime contractor Westinghouse – the parties agreed to new provisions in their legal ownership agreement. Power Engineering noted, “Those clauses allegedly would shift construction cost responsibility above a certain level to Georgia Power. They also claim the right to give up some of their ownership stake in the Alvin W. Vogtle Units 3 and 4 project.”
Two days after filing the suit, Oglethorpe said it would exercise its option to freeze its share of the capital costs for the project, yielding to Georgia Power some 42 MW of its share of the project.
If Georgia Power loses, it can pass the disputed costs on to Southern Co.’s shareholders, not to its customers. The public power systems have no shareholders. They would have to pass the costs on to their customers.
–Kennedy Maize
Twitter (@kennedymaize)