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JEA And City Sue While Facing Countersuit Over Expensive Ga. Nuclear Project

800px-Vogtle_NPP.jpg
Alvin Ward
/
Vogtle Nuclear Power Plant via Wikimedia Commons
The existing portion of the Plant Vogtle nuclear plant in Augusta, Ga. is pictured.

Jacksonville’s electric utility and City Hall filed a lawsuit Tuesday seeking to void a controversial decade-old agreement obligating local ratepayers to help build and eventually buy power from two planned nuclear reactors in Georgia, a significant escalation in a fight over the future of the only active nuclear power project in the United States.

Our Florida Times-Union news partner reports the Municipal Electric Authority of Georgia, one of the co-owners of the Plant Vogtle nuclear expansion project, also filed a federal lawsuit against JEA on Tuesday accusing the Jacksonville electric agency of having “a clear intent to breach its contract, abandon its obligations” and to “undermine and disrupt” the future of the project.

The dueling lawsuits cap off weeks of tension between the two agencies. JEA has sought for months to get out of the 2008 purchase-power agreement it signed with MEAG, the subject of acidic letters the two agencies have traded in recent weeks. Since the project began, the Vogtle expansion has seen a number of cost overruns and delays, and JEA’s obligations have ballooned with it.

JEA’s financial obligations likely top $2.25 billion over the 20-year life of the agreement.

“The citizens and ratepayers in northeast Florida rely on JEA to manage the electric utility system in a prudent manner and to protect them from unjust, ill-considered, or extortionate contracts,” lawyers for JEA and the City of Jacksonville wrote in their lawsuit.

But, the lawyers wrote, under the purchase power agreement with MEAG, “ratepayers are burdened for 20 years by the obligation to fund a project in which JEA retains no ownership interest, over which JEA has no management or budgetary control, and from which ratepayers may never receive any electricity or capacity notwithstanding the massive unconditional financial obligations incurred.”

In a nutshell, JEA’s lawsuit argues the board of directors overstepped its authority when it signed off on the 2008 purchase-power agreement. Neither state nor local law allows a Florida public agency to enter into the kind of agreement JEA has with MEAG, the suit said. JEA wants a judge to void the contract.

The agreement locks JEA into paying construction debt whether the reactors are eventually built or not.

“These ‘hell-or-high-water’ contracts specifically provide that the buyer has no right, under any circumstances, to abandon the contract or be relieved of its contractual obligations,” MEAG attorneys argued.

MEAG is asking a federal judge to impose the purchase-power agreement on JEA and is also seeking an unspecified amount in damages.

“JEA’s actions in denying the enforceability of the (agreement) have already created uncertainty in MEAG’s ability to fulfill its own obligations under the (agreement), as well as uncertainty in determining whether to proceed or cancel the Vogtle Project,” the agency’s lawyers wrote.

“MEAG has been forced to expend money, time, and attention to deal with that uncertainty.”

Plant Vogtle’s co-owners — the private utility Georgia Power, MEAG, the City of Dalton and Oglethorpe Power — recently said the cost of Vogtle had increased by $2.3 billion, pushing the project cost up to about $27 billion and triggering a requirement that the co-owners vote to continue the project. MEAG’s vote is Sept. 24, though JEA has pushed for the owners to delay voting until Oct. 31 or later.

MEAG’s lawsuit showed no indication that vote will be delayed.

A longer version of this story that includes a look at the changing circumstances of the nuclear deal is at Jacksonville.com.

Photo used under Creative Commons license.