Nuclear

Georgia Power settles part of a dispute with its Vogtle nuclear co-owners

The utility agreed to take on millions of dollars in construction costs in exchange for a pledge by one of its co-owners to keep its ownership stake.
Georgia Power settles part of a dispute with its Vogtle nuclear co-owners
Vogtle Unit 4 (left) and Unit 3 (right). Credit: Georgia Power

Georgia Power settled part of a dispute with a co-owner of the two-unit Vogtle nuclear power plant expansion.

Worries over the increasingly expensive and long-delayed 2,200 MW nuclear power project led Oglethorpe Power Corp. and the Municipal Electric Authority of Georgia (MEAG) to ask a court last June to allow them to cap their exposure to rising construction costs and hand over at least a portion of their ownership stake.

At issue was whether or not cost increases related to the new nuclear units triggered clauses in a 2018 ownership agreement. Those clauses allegedly would shift construction cost responsibility above a certain level to Georgia Power. The two project partners also claimed the right to give up some of their ownership stake in the Alvin W. Vogtle Units 3 and 4 project.

The lawsuit was filed June 18 in the Superior Court of Fulton County, Georgia. On September 26, a third owner, Dalton Utilities, filed its own complaints in each of the lawsuits.

Days later, Georgia Power and MEAG Power agreed to resolve their dispute. Details of the settlement were included in Southern Company’s third quarter earnings statement, filed with federal securities regulators on October 27. Georgia Power is a unit of Southern Company.

Under terms of the settlement, MEAG Power agreed not to exercise its tender option and will retain its full ownership interest in Plant Vogtle Units 3 and 4. MEAG Power also agreed to vote to continue construction should a future Project Adverse Event occur, unless the commercial operation date of either of unit drags on beyond Dec. 31, 2025. 

In return, Georgia Power agreed to pay a portion of MEAG Power’s costs of construction as those costs arise. Payments are expected to total around $79 million based on current project capital cost forecasts.

Georgia Power also agreed to will pay 20% of MEAG Power’s costs of construction with respect to amounts over and above the current project capital cost forecast.

On October 4, MEAG Power and Georgia Power filed a notice of settlement and voluntary dismissal of their pending litigation, including Georgia Power’s counterclaim. Two days later, Dalton dismissed its related complaint.

The settlement did not, however, resolve the separate litigation involving Oglethorpe Power, including Dalton Utility’s associated complaint. 

Georgia Power said it may be required to record further charges to income that could be as high as $300 million. And while its ownership interest continues to be 45.7%, that share could grow if Oglethorpe or Dalton opt to turn over their ownership share to Georgia Power and require it to pay all of their remaining costs to complete the nuclear units. 

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