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Jax Daily Record Thursday, Jul. 30, 202004:30 PM EST

JEA, city settle nuclear Plant Vogtle lawsuit with MEAG

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All parties will drop legal action and the 2008 purchase power agreements stands. 
by: Mike Mendenhall Staff Writer

JEA and the city of Jacksonville announced July 30 a settlement in the legal fight with Municipal Electric Authority of Georgia over a purchase power agreement for nuclear Plant Vogtle.

JEA and the city agreed to dismiss their civil suit against MEAG pending in U.S. District Court. MEAG will drop its lawsuit against JEA.

JEA, MEAG and the city agreed to accept U.S. District Judge Mark Cohen’s June 17 decision that the 20-year purchase power agreement between the entities is valid and enforceable. JEA’s appeal was scheduled for oral arguments Aug. 13.

JEA signed the agreement with MEAG in 2008 to use nuclear energy from the power plant under construction about 20 miles south of Augusta, Georgia, after the estimated $20 billion project is complete in 2021 or 2022.

JEA has been trying to get out of the agreement, which requires the utility to buy energy and to pay each year for some of the debt for the ongoing construction cost. Those payments could be as much as $123 million per year.

A $41 million payment is expected to be due before the two reactors come online by the end of 2022.

“We are pleased to have reached a settlement with JEA and the City of Jacksonville to put this matter behind us,” said James E. Fuller, MEAG Power president and CEO, in a news release. 

“We believe this settlement is the best outcome for all involved, and we look forward to a mutually beneficial relationship that helps MEAG Power and JEA deliver cost-effective, emissions-free power to our respective customers in the coming decades,” he said.

JEA’s legal expenses fighting the Plant Vogtle agreement exceeded $9 million, according to a July 21 memorandum from interim Managing Director and CEO Paul McElroy. JEA expected its legal bills to grow as active discovery continued in MEAG’s counterclaim lawsuit.

“We likewise are pleased to have reached this settlement with MEAG Power and look forward to Vogtle Units 3 and 4 coming online in the near future,” McElroy said. “The reliable, emissions-free power from Plant Vogtle will help JEA continue to serve our Jacksonville-area customers with ever-cleaner power into the future.”

The settlement comes days after a July 28 shade meeting between the JEA board of directors, executives, and attorneys from the city Office of General Counsel and Stephen Busey, private counsel retained by JEA.

When JEA entered into its agreement with MEAG in 2008, Vogtle was expected to help JEA reduce its carbon footprint with zero-CO2-emission power. 

In 2008, JEA and MEAG estimated the plant would produce 206 megawatts of capacity and related energy. MEAG’s total interest in Vogtle Units 3 and 4 is about 22.5% or 500 megawatts, according to McElroy’s memo.

The 206 megawatts will be about 13% of JEA’s total energy requirements in 2022 when both Vogtle units come online. 

Vogtle Units 3 and 4 were supposed to be in service April 2016 and April 2017, according to the memo. Construction and other delays pushed that to November 2021 and November 2022.

 An updated cost estimate and schedule is expected to be filed with the Georgia Public Service Commission this month, the memo said.

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