Oglethorpe, MEAG vote to move forward with Vogtle nuclear project
Update: Owners of the Vogtle plant have agreed to a 5 p.m. EDT deadline on Tuesday to agree on final details for construction. Read Utility Dive's continuing coverage here.
Board members of the Municipal Electric Authority of Georgia (MEAG) voted unanimously on Monday to continue participation in the Vogtle nuclear project, giving the beleaguered plant expansion one of two approvals it needs to avoid being abandoned by its owners.
About four and a half hours later, Ogelthorpe Power, the last of the four partners to vote, gave its conditional approval to its continuing participation.
Georgia Power and Dalton Utilities, which own the remainder of the project, have already said they would stick with the project, which is years behind schedule and billions over budget. The Department of Energy last week urged the utilities to complete the plant.
Pressure has been building for the partners in the Vogtle nuclear project to abandon the partially built plant ever since a unit of Southern Co., the corporate parent of Georgia Power, added another $2.3 billion to the project's estimated cost last month.
The total cost of the nuclear project, which was originally estimated at $14 billion, is now estimated at $27 billion.
In its vote, Oglethorpe Power conditioned its backing of the project with "several cost control options," such as a cap at the current project budget, including the recent $2.3 billion increase, and leeway for the utility to add $800 million to its budget for the project.
Southern owns about half of the project and said that its shareholders, not ratepayers, would absorb its $1.1 billion share of the most recent cost increase.
As municipal utilities and electric cooperatives, Southern's partners in the project do not have that luxury because they only have customer-owners. Oglethorpe owns 30% of the Vogtle project, while MEAG has 22.7% and Dalton 1.6%.
After the recent $2.3 billion cost increase, the Jacksonville Electric Authority (JEA), a municipal utility from Florida, wrote a letter to MEAG asking it to cancel a power purchase agreement for Vogtle. JEA then sued MEAG over the PPA, and MEAG responded with a lawsuit alleging breach of contract by JEA.
JEA signed an offtake agreement with MEAG back in 2008, agreeing to buy some of the output of the Vogtle plant when it is completed.
Earlier in the month, 20 members of Georgia's Legislative Assembly wrote a letter to the owners of the Vogtle project expressing their concern about the "unfair impact" of the cost increases on their constituents, who are either members of MEAG or of an electric cooperative. The legislators asked the owners to impose a cost cap to protect ratepayers from the recent $2.3 billion cost increase, as well as from any future cost overruns.
On the day before the vote, the Department of Energy said that if the project is canceled it could require that the $5.6 billion of government backed loans the department extended to the project so far be repaid immediately. The original term of the loan was for 25 years.
MEAG's decision was "disappointing, but not surprising," Jill Kysor, staff attorney with the Southern Environmental Law Center, told Utility Dive. Despite the fact that the project's schedule and costs have slipped many times, "we have seen owners continue to move forward without much hesitation even in the face of billions of dollars of increases over time," she said.
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