JEA sues to get out of Georgia nuclear contract

Lawsuit filed in Florida court same day Georgia utility filed federal suit

By Steve Patrick - News4Jax digital managing editor

JACKSONVILLE, Fla. - JEA and the city of Jacksonville have filed a complaint with a Florida court asking for declaratory judgment on an agreement with the Municipal Electric Authority of Georgia (MEAG Power) agreeing to power electricity from Plant Vogtle, a nuclear power plant under construction in Georgia.

JEA entered into the power purchase agreement in 2008. The power provided under the agreement was to be from two new Plant Vogtle units that would provide power to JEA customers in addition to ratepayers across Georgia beginning in April 2016. The project was expected to cost $9.5 billion in direct costs ($14.8 billion total, including indirect and financing costs). The total cost of the portion attributable to JEA was $1.4 billion. The project cost was capped under the 2008 agreement.  

Today, the project’s total cost-to-completion estimates have increased to more than $30 billion, with no guarantees that costs could grow beyond that and with a delayed completion date of November 2021.

A new unlimited cost-plus reimbursement agreement was implemented without JEA’s approval in June 2017 after the project’s initial general contractor, Westinghouse, declared bankruptcy. The amended agreement has increased JEA’s liability to more than $2.9 billion, although that amount is uncapped and has continued to rise.

The city and JEA's complaint seeks to clarify the validity of the amended purchase power agreement. It was never approved by the Jacksonville City Council and the JEA and city lawyers believe the agreement violates the Florida Constitution, and therefore should be void and is unenforceable.

The suit was filed in an effort to protect JEA’s ratepayers from the escalating costs from the project.

“It has become clear that this purchase agreement should be considered ‘ultra vires’ since it was implemented without the approval of the City Council, which violates Florida law,” JEA Interim Managing Director Aaron Zahn said. “A favorable judgment from the court deeming the agreement void will have the added benefit of providing relief to ratepayers across northeast Florida from having to shoulder the financial burden of this project.”

The complaint was filed in the Fourth Judicial Circuit Court of Florida Tuesday, the same day that MEAG Power filed a breach of contract lawsuit against JEA in the Federal Court for the Northern District of Georgia. 

 

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