Monthly Archives: September 2018

Vogtle nuke faces new vote as muni lawsuit puts construction at risk

7dec2074a824c355b09bf37e588ca45eby Robert Walton
9/14/18 UTILITY DIVE

Dive Brief:

  • Rising costs for the development of two new nuclear units at the Vogtle plant in Georgia have spawned dueling lawsuits between an owner of the project and a municipal utility that claims it never signed up for the perpetual cost increases — and if it did, it shouldn’t have been allowed to.
  • Jacksonville Electric Authority (JEA) has asked a Duval County, Fla., circuit court to find a 2008 power purchase agreement (PPA) to be unenforceable, claiming it violates the state’s constitution, laws and public policy, and the city’s elected leadership had not given its blessing to the deal.
  • Development of Units 3 and 4 was initially expected to cost $7.3 billion but over the years that price tag has ballooned to more than $27 billion. According to the Augusta Chronicle, JEA’s obligations over the 20-year life of its agreement could be more than $2 billion.

    Dive Insight:

    JEA is showing signs of buyer’s remorse, but given the nearly 400% cost increase it’s hard to blame the municipal utility.

    JEA is suing one of Vogtle’s owners, the Municipal Electric Authority of Georgia (MEAG), requesting a declaratory judgment that the PPA they agreed to cannot be enforced. The utility argues the Jacksonville City Council did not approve the deal; JEA’s board overstepped its authority in making the arrangement; and Florida law prohibits the contract.

    Read the whole article: Utility Dive

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Contract dispute threatens $27bn Vogtle nuclear project

Vogtleconstructionby Ed Crooks
9/13/18 NEW YORK — A legal battle has flared up over the only new nuclear power plant under construction in the US, raising questions about the $27bn project’s future.

Companies involved in the plan to build two reactors in Georgia have sued each other over a contract to buy electricity from the plant, as communities argue over who should bear the rising cost of the project. The outcome of the dispute will have implications for the nuclear industry in the US and internationally.

The two Westinghouse AP1000 reactors being built at the Vogtle power plant in Georgia have been hit by delays and cost overruns, but the companies leading the project are still pressing ahead with construction.

However, the city of Jacksonville in Florida and its electric utility JEA, which had agreed to buy power from the plant for 20 years, are attempting to escape from that contract. In a filing at a Florida court on Wednesday, the city argued that the 2008 agreement to buy power from the plant was in breach of state law and therefore unenforceable.

In their filing, Jacksonville and JEA said the contract “purports to saddle JEA and its ratepayers with an unlimited obligation to fund the exorbitant and ever-ballooning cost of constructing units of a nuclear power plant that JEA does not own.”

Read the whole article: Financial Times

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JEA sues, and is sued, over fate of expensive nuclear project

Vogtle_cranesby Nate Monroe
9/12/18 JACKSONVILLE: Jacksonville’s electric utility and City Hall filed a lawsuit Tuesday seeking to void a controversial decade-old agreement obligating local ratepayers to help build and eventually buy power from two planned nuclear reactors in Georgia, a significant escalation in a fight over the future of the only active nuclear power project in the United States.

The Municipal Electric Authority of Georgia, one of the co-owners of the Plant Vogtle nuclear expansion project, also filed a federal lawsuit against JEA on Tuesday accusing the Jacksonville electric agency of having “a clear intent to breach its contract, abandon its obligations” and to “undermine and disrupt” the future of the project.

The dueling lawsuits cap off weeks of tension between the two agencies.

JEA has sought for months to get out of the 2008 purchase-power agreement it signed with the authority, the subject of acidic letters the two agencies have traded in recent weeks. Since the project began — a run of years during which the federal government supported nuclear power, and the industry’s prospects seemed much brighter — the Vogtle expansion has seen a number of cost overruns and delays. JEA’s obligations have ballooned with it.

JEA’s financial obligations likely top $2.25 billion over the 20-year life of the agreement.

Read the whole article: Florida Times-Union

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A Crack in Co-owner Support for Vogtle, as Costs Skyrocket

vogtle-1-2-3-4by Gloria Tatum
9/8/18 (APN) ATLANTA — As the cost projections for the nuclear reactors 3 and 4 at Plant Vogtle continue to skyrocket, co-owner support for Plant Vogtle is on increasingly shaky ground, especially as credit rating agencies are talking downgrades based upon the instability of cost projections around finishing the reactors.

Georgia Power’s announcement last month of an unexpected increase of 2.3 billion dollars more to complete Vogtle 3 and 4 has triggered confusion and the requirement for a vote by each of the co-owners on whether to continue participating in the project by late September 2018.

Georgia Power cannot assure that the price will not continue to go up or that the service date will not continue to be kicked down the road by ongoing delays.

This has spooked both Wall Street and some minority co-owners of Vogtle 3 and 4.

Moody’s Investors Services has already issued a downgrade to Georgia Power’s rating, saying the 2.3 billion dollar increase comes just eight months after the Georgia Public Service Commission signed off on the previous round of increased cost estimates.

Co-owners’ exposure to cost increases has no actual end in sight, and this has consequences for investors.  Additional downgrades for co-owners are expected.

Now, Jacksonville Electric Authority (JEA) wants out of its agreement with Municipal Electric Authority of Georgia (MEAG) to buy power from Plant Vogtle 3 & 4 for the next twenty years and to share in the construction cost.  MEAG is one of the co-owners of Vogtle 3 and 4, owning 22.7 percent of the project.

In addition, Oglethorpe Power–a thirty percent co-owner–will have to nearly exhaust its 490 million dollar contingency fund, according to a company press release.

Read the whole article: Atlanta Progressive News

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