By Dean Seal
Georgia Power has agreed to pay at least $413 million to resolve a legal dispute over the terms of a cost-sharing agreement with another Georgia utility related to their jointly owned nuclear plant.
The Southern Co. subsidiary said Friday that it will pay Oglethorpe Power $308 million to cover some of the construction costs for two of the four units at the Alvin W. Vogtle Electric Generating Plant.
Georgia Power has also agreed to cover a portion of future construction costs, which is currently estimated to equal about $105 million, based on the current project capital cost forecast. The utility will cover two thirds of any costs incurred above the current forecast.
Southern Co. said in a securities filing that Georgia Power expects to record a $114 million after-tax charge for the third quarter as a result of the settlement.
The deal resolves a claims filed last year by Oglethorpe tied to the two utilities’ joint ownership agreement for Plant Vogtle.
Georgia Power had agreed to bear responsibility for up to $99 million of Oglethorpe’s construction cost overruns. Oglethorpe was also given a one-time right to tender some of its ownership in the plant to Georgia Power in exchange for coverage of cost overruns if the estimated cost at completion of the two units exceeded a certain level.
The two utilities and the city of Dalton, Ga., another co-owner of Plant Vogtle, were unable to agree on the starting dollar amount for the determination of cost increases subject to the cost-sharing and tender provisions of their ownership agreements. They also disagreed on the extent to which costs related to Covid-19 impacted those provisions.
Oglethorpe and Dalton alerted Georgia Power in February 2022 that the tender provisions had been triggered, and then said months later that they would exercise their tender options, but Georgia Power rejected the exercises. Oglethorpe filed a lawsuit in response, and the city of Dalton joined the suit soon after.
The settlement reached with Oglethorpe doesn’t resolve the pending litigation from Dalton, which could expose Georgia Power to up to about $17 million in further pre-tax charges, the utility said Friday.
Georgia Power has already resolved a similar dispute with the Municipal Electric Authority of Georgia, another co-owner of Plant Vogtle.
In the same filing, Southern Co. said Georgia Power has identified a motor fault in one of four reactor coolant pumps at one of the four Plant Vogtle units and started the process of replacing it with an on-site spare. As a result, Georgia Power projects that the unit’s in-service date will arrive in the first quarter of next year.
Write to Dean Seal at [email protected]
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