Plant Vogtle

Plant Vogtle is a nuclear power plant in Georgia. A project to construct two new power-generating units at the facility, Unit 3 and Unit 4, is currently in progress. The project was initially expected to cost $14.8 billion, with Unit 3 to be completed in April 2016 and Unit 4 in April 2017.

In 2008, JEA entered into a purchase power agreement (PPA) with one of the project owners, the Municipal Electric Authority of Georgia (MEAG Power). Under the agreement, JEA would support a portion of the project’s costs in exchange for receiving power from the units once they were completed. The total cost of the project attributed to JEA in 2008 was $1.4 billion. This amount was not expected to change over the course of the project.

This agreement would provide JEA with a means to diversify its fuel sources. This would ensure JEA is not overly reliant on any one fuel source to provide power to ratepayers across Northeast Florida. In addition, this fuel diversity would help maintain price competitiveness for JEA customers.

In 2008, at the time of the agreement, nuclear power was widely viewed as reliable, economical and environmentally sound. JEA’s decision to support the Plant Vogtle project was part of a larger national trend toward nuclear power. There were dozens of nuclear power plant construction projects in active development during the 2000s. 

However, in the years since the project began, a number of developments have made nuclear power plant construction economically infeasible. With the exception of Plant Vogtle, every nuclear power plant construction project in the United States has been shut down. Even so, its progression has not been as stable or reliant as promised.

As of August 2018, the project has experienced years’ worth of delays and exorbitant cost increases. The total cost-to-completion estimates have increased to more than $30 billion, with no guarantees that the amount will not rise again. The estimated completion dates have been delayed to November 2021 for Unit 3 and November 2022 for Unit 4. 

There are several reasons why the project has experienced delays and cost increases. One of the most impactful developments was when the project’s initial general contractor declared bankruptcy in March 2017. This led to the project owners entering into a new, amended agreement with a new contractor in June 2017.

The new agreement, which was implemented without JEA’s input, is an unlimited cost-plus reimbursement agreement. This means JEA’s liability is no longer capped at a fixed amount. Because of this, JEA’s liability has increased to more than $2.9 billion, an amount that is subject to additional increases in the future.

JEA’s highest priority is to protect the interests of its ratepayers, so it has been working for months to find a solution that relieves its customers from shouldering the financial burden of this project’s delays and cost increases. 

JEA has made several attempts to protect ratepayers from these ballooning costs, such as securing alternate power arrangements that would save the Plant Vogtle project participants at least $2.5 billion over the next 20 years. However, the project owners have refused these alternatives and decided to move forward with construction on the new units.

In September 2018, JEA and the City of Jacksonville filed a complaint in the Fourth Judicial Circuit Court of Florida for declaratory judgement on the PPA. The complaint seeks to clarify the validity of the amended agreement, which was never approved by the Jacksonville City Council. JEA believes the agreement violates the Constitution of the State of Florida and should be declared “ultra vires,” which means it is void and unenforceable.

JEA also filed a petition for declaratory order with the Federal Energy Regulatory Commission (FERC). The petition asks the FERC to recognize the PPA as subject to the commission’s jurisdiction under the Federal Power Act (FPA). If the PPA falls under the scope of the FERC, it will also be subject to the FPA’s just and reasonable standards. JEA believes the agreement fails to meet these standards due to continuing cost increases and completion delays.

The Plant Vogtle project delays and cost increases place an unfair burden on ratepayers across Northeast Florida, so JEA is acting to remove this burden from its customers. JEA has and always will seek to provide reliable and safe utilities at the lowest possible cost and will continue to work in the best interest of its customers and the communities it serves. 

JEA has a strong financial position that enables it to honor and fulfill all of its financial obligations. In the most extreme circumstances, JEA has enough cash in its electric system to operate for more than seven months and enough cash in its water and sewer system to operate for more than one year without additional revenues. This will not change, in spite of any third-party speculation. Regardless of its financial standing, JEA’s first priority is to protect its ratepayers’ best interests, which is why it’s continuing to act to remove itself from the Plant Vogtle project’s continuing delays and cost overruns.

It is too soon to determine the effect of the recent credit downgrades, but JEA is acting to ensure these developments do not impact its customers.

Regardless of the outcomes of these legal cases, JEA will remain committed to providing reliable and affordable energy to Northeast Florida residents who rely on JEA to power their workplaces, homes and communities.