The parties agreed to drop the lawsuits and counter claims, as part of the deal announced Friday. Under the settlement terms, MEAG Power will maintain its 22.7% stake in the new Vogtle units and agreed not to exercise its option.
Georgia Power will pay 20% of MEAG Power’s share of future cost overruns, while MEAG agreed to vote to continue the Vogtle project, unless either the projected completion dates for either units slips beyond December 31, 2025.
Credit: Curtis Compton / Curtis.Compton@
Credit: Curtis Compton / Curtis.Compton@
The settlement should not raise rates for Georgia Power customers — the utility has said it will not seek to recover any new costs stemming from its co-owners’ actions from customers.
Georgia Power currently holds the largest share with 45.7%, followed by Oglethorpe Power — a cooperative serving utilities across the state — which owns 30%. Dalton Utilities has the smallest share at 1.6%.
A MEAG Power spokesman said the agency had no comment on the agreement.
Georgia Power spokesman Jacob Hawkins said the company is pleased to have reached a settlement with MEAG and that the organization will retain its full ownership stake.
“We continue to work constructively with all our partners to complete the Vogtle expansion, bringing clean and reliable energy to Georgia,” Hawkins added.
Georgia Power’s disputes with its two other co-owners remain unresolved.
In June, Oglethorpe filed suit against Georgia Power for breach of contract and other Vogtle cost-sharing claims. Oglethorpe also activated an option to cap the construction costs it will have to pay at $8.1 billion. If the move goes through, Oglethorpe will forfeit 2% of its stake to Georgia Power, dropping its share from 30% to 28%.
The board of Dalton Utilities also recently voted to halt its spending on the reactors, citing concerns over the project’s rising price tag.
In both of those cases, Georgia Power has said it does not believe spending has hit the exact dollar amount for either entity to activate their options. Georgia Power estimates those two disputes could cost the company an additional $165 million.
Despite the acrimony, there are signs the new Vogtle units may finally be nearing completion. This summer, federal regulators granted Georgia Power’s sister company Southern Nuclear Operating Company authorization to load fuel into Vogtle Unit 3. Once the company completes the necessary testing, fuel load could commence as soon as this month.
Georgia Power has said that it expects Unit 3 to begin generating electricity early next year, with Unit 4 joining it online by the fourth quarter of 2023.
Once online, Georgia Power says the Vogtle’s four reactors will generate enough total electricity to power one million homes and businesses. And as the effects of climate change worsen, the plant will produce electricity without contributing greenhouse gas emissions.
However, Georgia Power’s customers will pay handsomely for the project for years to come.
By the time the reactors are completed, the average residential user will have already paid $900 to cover Vogtle construction costs, according to estimates by Georgia Public Service Commission (PSC) staff.
Once the two units begin producing electricity, even more rate hikes to cover the units’ growing costs are likely to kick in.
Exactly how much will be determined by the five elected members of the PSC.
Georgia Power has estimated that baking in Vogtle costs could ultimately drive customers’ electricity rates up by 10%. However, analysis by commission staff has out the potential increase closer to 13%. In addition to any Vogtle related hikes, Georgia Power is also currently seeking the PSC’s approval of new electricity rates that could drive up the average customer’s annual bill up by nearly $200 over the next three years.
In the meantime, the company’s spending on the nuclear project continues to grow.
In a semi-annual update filed with state regulators in late August, Georgia Power revealed it spent more than $500 million on the two reactors in the first half of this year, and said completing both units may ultimately cost another $1 billion.