Southern Company’s subsidiary, Georgia Power, has a construction project underway at Plant Vogtle – building two AP1000 Westinghouse nuclear plants near Waynesboro, GA. Partnered with them on this Vogtle Expansion Project is Oglethorpe Power – which represents Georgia’s electric membership corporations, as well as Dalton Utilities – and MEAG (Municipal Electric Authority of Georgia) which represents dozens of city utilities.
Sometime after the project began, MEAG sold some of its rights to Vogtle’s power – as well as much of its responsibilities for construction costs – to the Jacksonville Electric Authority (JEA).
Last year, JEA began a push to drop out of the agreement with MEAG. JEA no longer wants to part of the project, nor do they want to be on the hook to purchase any power that will be generated when the project is completed. JEA believes the project is headed for a similar fate as the VC Summer Expansion Project in South Carolina, abandoned in July 2017, as the project’s costs continued to soar without a cap on how much higher it might go. In addition, should the project be completed successfully, they believe cost for the power produced will be more expensive than what it would cost them from some other sources.
JEA’s new leadership contends that JEA’s past executives did not have the legal authority to strike such a deal – JEA and MEAG are suing each other, with MEAG arguing that JEA knew what they were getting into and are legally bound to abide by it.
This legal battle has raised questions about whether or not the Vogtle Expansion Project could be halted if JEA won its case – could such a decision, threaten the resolve of the other co-owners to continue the project – would some other utility be willing to take on JEA’s share of the risks and costs?
A recent court filing by Justice Department attorneys representing the U.S. Department of Energy recently filed a “statement of interest” in the case, and they have warned that the moves by JEA could put at risk hundreds of millions and potentially billions of dollars in federal loan guarantees blanketing the Georgia project.
JEA wants its lawsuit moved from the federal court to a state court, saying that the issues involve only Florida and local laws and state policy. The U.S. government wants it kept in federal court, citing “significant federal interests” involved.
Federal attorneys argue that if JEA succeeds in its lawsuit, the DOE would likely have to make payment on its guarantee loan of a $578 million to Vogtle because MEAG wouldn’t have enough funds to cover the obligation. “And given the potential domino effect,” that could lead to unwillingness or inability of Vogtle’s other owners to cover costs, which could jeopardize completion of the project, according to the federal filing. That “could result in demands that DOE honor its guarantees as to the broader $8.3 billion in loans.”
Vogtle is the only commercial nuclear power plant construction project underway in the U.S., and the DOE (Department of Energy) wrote, Its completion is “important to preserving the United States’ leadership in civilian nuclear power generation” and “will demonstrate the domestic civilian nuclear industry’s ability” to tackle new nuclear projects under current conditions.
Meanwhile, the Federal Energy Regulatory Commission has refused to weigh in on the fight between JEA and MEAG. Both JEA and MEAG are traditionally exempt from FERC oversight.