New $900 million Vogtle lawsuit filed

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New $900 million Vogtle lawsuit filed

The main contractors building two nuclear reactors at Plant Vogtle filed a more than $900 million lawsuit against Georgia Power and other utility groups Thursday, escalating a fight over the project’s costs.

The move suggests months of negotiations over who is responsible for cost increases have failed, raising the risk that Georgia Power’s customers, who already are paying for the project in monthly power bills, eventually may be on the hook for more.

The lawsuit, filed in U.S. District Court in Washington, is the third between the parties, but the amount in dispute is significantly higher.

Georgia Power owns 45.7 percent of the Vogtle project, so if it loses the lawsuit, its share of the payment would be $425 million.

At this point, customers are paying down the financing costs of Georgia Power’s $6.1 billion share of the $14 billion project through a monthly fee on their utility bills. The concern is if Georgia Power loses the lawsuit or settles, the burden on customers will increase.

“We were concerned from the beginning for Georgia Power ratepayers,” said Sara Barczak, the high risk energy director for the Southern Alliance for Clean Energy, one of the groups that opposed the expansion of Vogtle.

“Even if they got this settled, we would find it hard to believe that Georgia Power wouldn’t be on the hook for some of the costs. To see that their mediation and whatever else they were doing did not work so early in the project is a big red flag,” Barczak said.

The Georgia Public Service Commission, which must review the Vogtle project’s cost and schedule every six months, would have to approve any impact on customers.

The utility maintains it is not responsible for the issues alleged in the lawsuit or the costs associated with it.

“After extensive efforts to reach a settlement with the contractors, we have been unable to arrive at an agreement,” Georgia Power spokesman Mark Williams said in a statement. “Georgia Power has not agreed with the amount of these proposed adjustments or that the owners have responsibility for any costs or schedule delays related to these issues.”

The dispute was first revealed in a regulatory filing from Atlanta-based Southern Co., Georgia Power’s parent, in April. The contractors filed a separate lawsuit in July, saying that Georgia Power and the other utilities owe money for additional expenses that came from backfilling two excavation sites there.

Georgia Power filed its own lawsuit over backfill in August, asking for a $29.3 million refund from the contractors.

In this week’s lawsuit, Westinghouse Electric Co. and a subsidiary of the Shaw Group say they should be paid for additional work that needed to be done to comply with federal regulatory changes in the project’s design. They also want money to compensate for the utilities’ 10-month delay in getting the main license to start heavy construction at Vogtle, in Waynesboro.

Specifically, the contractors want:

* $600 million for design changes in the shield building, a structure that protects the reactor vessel and radioactive systems.

* $74 million for design changes in structural modules, parts of the reactor that are built elsewhere and then assembled at Vogtle’s construction site.

* $244 million from a “delay to the critical path of the project schedule,” the lawsuit says.

The central issue is interpreting a private contract between the owners and vendors. According to the lawsuit, “the owners were required to obtain the (construction license) for the project on or before July 1, 2011, in order to allow the contractor to achieve its plan for achieving substantial completion of the project.”

The contract says getting the reactor design approved was the vendor’s responsibility, according to documents filed in August by Georgia Power.

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