Georgia Power will pay $413 million to settle lawsuit over nuclear reactor cost overruns

Here's a look at some of the latest photos out of Plant Vogtle, taken in June 2023.
Here is a take a look at a number of the newest pictures out of Plant Vogtle, taken in June 2023.(Contributed)

(AP) – Georgia Energy Co. pays $413 million to settle a lawsuit accusing the utility of reneging on monetary guarantees to one in every of its nuclear reactor companions.

The funds to Oglethorpe Energy Corp., introduced Friday, might maintain down future payments for thousands and thousands of electrical cooperative prospects in Georgia.

Oglethorpe sued Georgia Energy in June 2022 in a contract dispute over who ought to pay for price overruns for a 3rd and fourth reactor at Plant Vogtle, southeast of Augusta.

Atlanta-based Southern Co., which owns Georgia Energy, mentioned it will write off a $152 million loss on the settlement.

Georgia Energy additionally introduced Friday that it should change one of many 4 large pumps that cools the Unit 4 reactor after operators discovered an issue with the pump’s motor throughout testing. Georgia Energy mentioned it believes the issue is an “remoted occasion” and has a spare pump on website, however mentioned the alternative ends the corporate’s hope of putting Unit 4 in business operation this 12 months. The utility mentioned the reactor remains to be on schedule to start working by March. That was already the corporate’s fallback date.

Unit 3 entered business operation on July 31, changing into the primary new nuclear unit constructed from scratch in the US in a long time.

Some Florida and Alabama utilities have additionally contracted to purchase Vogtle’s energy.

The general mission is seven years late and $17 billion over funds. Vogtle’s prices and delays might deter different utilities from constructing nuclear crops, regardless that they generate electrical energy with out releasing climate-changing carbon emissions.

Oglethorpe, which generates and transmits electrical energy to 38 Georgia electrical cooperatives that personal it, will hold its present 30% possession share of Vogtle below the settlement. Oglethorpe had initially sought to promote a few of Vogtle’s producing capability again to Georgia Energy.

Heather Teilhet, Oglethorpe’s senior vp of exterior affairs, mentioned Oglethorpe desires to maintain its 660-megawatt share of Vogtle’s era to fulfill rising demand.

“We’re seeing development on our system, so there’s nice worth in preserving our full Vogtle capability, particularly at a considerably decreased price,” Teilhet mentioned in a press release.

Presently, all of the homeowners are projected to pay greater than $31 billion in capital and financing prices, Related Press calculations present. Add in $3.7 billion that unique contractor Westinghouse paid to the Vogtle homeowners to stop constructing the reactors, and the full nears $35 billion.

Apart from Oglethorpe and Georgia Energy, Vogtle’s homeowners embody the Municipal Electrical Authority of Georgia and the town of Dalton. MEAG and Dalton additionally sued. Georgia Energy agreed final 12 months to pay as much as $76 million to settle the lawsuit by MEAG, which gives energy to 49 municipal utilities. The Dalton lawsuit remains to be pending, and Georgia Energy mentioned Friday that it might owe the town as much as $17 million.

Georgia Energy prospects gained’t pay for the settlements. Georgia Energy has already reached a deal with regulatory workers about how a lot it should cost prospects for Vogtle, though the elected Georgia Public Service Fee has but to approve.

Georgia Energy had agreed in 2018 that it will pay rising shares of price overruns for co-owners as much as a sure ceiling. Past that, the co-owners had been entitled to pressure Georgia Energy to purchase a part of their possession stake in change for Georgia Energy protecting all remaining development prices.

Oglethorpe sought to activate the sale provision, saying it utilized as soon as development prices reached a complete of $19.2 billion. However Georgia Energy argued the settlement didn’t kick in till development prices reached $20.48 billion.

Underneath the settlement, Georgia Energy agreed to pay Oglethorpe the $99 million Oglethorpe was owed below the cost-sharing ceiling, in addition to $5 million in curiosity. Georgia Energy has already paid a part of that cash and pays the remaining $66.5 million inside 5 days.

Georgia Energy additionally agreed to pay 66% of Oglethorpe’s prices above the $19.2 billion stage, a complete of $346.3 million below projected spending ranges. That features a $241.2 million fee inside 5 days. In change for preserving its 30% possession stake, Oglethorpe is projected to pay one other $179 million by the point Unit 4 is accomplished.

Oglethorpe’s whole development and financing price for Vogtle is now projected to be $8.3 billion. That’s greater than the $8.1 billion Oglethorpe projected it will owe, however lower than the $8.64 billion that Georgia Energy mentioned Oglethorpe owed.

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