Vogtle co-owners take Georgia Power to court over cost disputes

FILE - The cooling towers of the still under construction Plant Vogtle nuclear energy facility in Waynesboro, Ga., Friday, March 22, 2019.   One of the owners of the plant announced Saturday, June 18, 2022, that it was freezing its costs and forcing Georgia Power Co. to assume all future overruns, giving up a share of its ownership to Georgia Power.  (Michael Holahan/The Augusta Chronicle via AP)

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FILE - The cooling towers of the still under construction Plant Vogtle nuclear energy facility in Waynesboro, Ga., Friday, March 22, 2019. One of the owners of the plant announced Saturday, June 18, 2022, that it was freezing its costs and forcing Georgia Power Co. to assume all future overruns, giving up a share of its ownership to Georgia Power. (Michael Holahan/The Augusta Chronicle via AP)

New lawsuits come as Vogtle’s two reactors appear to be near completion, but costs continue to climb

Just as two long-delayed nuclear reactors at Plant Vogtle appear to be nearing completion, two of the units’ co-owners have taken their partner, Georgia Power, to court in a dispute over who should bear the brunt of the project’s rising costs.

The new legal fights are the latest drama around the construction of Vogtle Units 3 and 4 — the first new commercial nuclear reactors built in the U.S. in decades — which remain more than five years behind schedule and billions over budget.

The two lawsuits were filed in recent days against Georgia Power by Oglethorpe Power, a cooperative that serves electric utilities across the state, and the Municipal Electric Authority of Georgia (MEAG Power), a nonprofit that provides wholesale electricity to dozens of communities in Georgia. Oglethorpe owns a 30% stake in the two new units under construction at Plant Vogtle, while MEAG Power holds 22.7%.

Georgia Power, meanwhile, currently owns 45.7% of the capacity of Units 3 and 4.

At the heart of both complaints against Georgia Power is a 2018 agreement inked when the parties were at odds over who should have to shoulder the rising costs from building the two units.

The agreement afforded Oglethorpe Power and MEAG Power, respectively, a one-time chance to avoid responsibility for more construction costs by giving up a portion of their ownership in the reactors, if cost overruns hit a certain threshold. Oglethorpe Power and MEAG Power say that costs since then have climbed past the trigger point the parties agreed to, but Georgia Power disputes that claim.

Oglethorpe Power has sued Georgia Power for breach of contract, among other claims, and alleges the company has reneged on its agreement.

“We expect our partner to honor their commitment and stand by the contract all co-owners signed in 2018,” Blair Romero, a spokeswoman for Oglethorpe Power, said in a statement.

Oglethorpe Power has also already moved to exercise its one-time option to cap the construction costs it will have to pay at $8.1 billion. In exchange, Oglethorpe will forfeit 2 percentage points of its stake in the project, dropping its share from 30% to 28%.

As a result, Georgia Power would see its ownership increase from 45.7% to 47.7%, but may have to shoulder Oglethorpe’s portion of any future cost increases. If the costs of the project continue to climb, Oglethorpe could lose a larger stake in the reactors’ generating capacity, but would be shielded from having to pay for those costs.

MEAG Power has not yet moved to exercise its tender option, but has filed suit in Fulton County Superior Court for breach of contract. It has also asked the court to determine exactly where the costs from the project stood when the agreement with Georgia Power was signed and how far they have climbed since.

Georgia Power spokesman Jacob Hawkins said, “We continue to have a difference of opinion and Georgia Power does not believe (Oglethorpe Power’s) tender notice is valid.” Hawkins said he was aware of MEAG Power’s lawsuit, but that the company had not seen it yet.

“Our focus continues to be bringing the Vogtle units online safely,” he added. “We will continue to engage with our co-owners productively as we achieve that goal.”

Vogtle Units 3 and 4 are being built near two existing units south of Augusta. The two units were first greenlit in 2009 and were originally expected to start generating electricity in 2017.

But delays have repeatedly pushed the reactors’ expected completion date. Over that time, Plant Vogtle’s total construction costs have ballooned to over $30 billion, more than double the $14 billion initial cost estimate, according to calculations by the Associated Press.

Georgia Power now projects that Unit 3 will be online by late 2022 or early 2023, with Unit 4 joining it by the third or fourth quarter of 2023.

Nuclear advocates say the technology can provide huge amounts of low-carbon energy, at a time when concentrations of greenhouse gases that are warming the planet continue to climb.

Meanwhile, opponents say the rising costs and delays that have afflicted Plant Vogtle. Some have also raised safety concerns about the reactors themselves and how to safely handle the radioactive waste they produce.

Kay Phillips, a spokeswoman for Dalton Utilities, which owns 1.6 percent of the new Vogtle units, said the utility has no comment at this time, but added that its management and board are reviewing the lawsuits.