Georgia Power Co. agreed to pay more than $400 million to settle a lawsuit on Friday, after Oglethorpe Power Corp. accused the utility company of failing to follow its financial commitments regarding maintenance of nuclear reactors at Plant Vogtle near Augusta. The company said it would take longer for the facility to become fully operational as a result, even as Georgia energy rates continue to increase.
The lawsuit was filed last year, reported The Associated Press, with Oglethorpe Power accusing Georgia Power of sticking them with nearly $700 million in additional costs by unilaterally changing a contract to make itself immune to cost overruns at the Plant Vogtle nuclear facility that is seven years behind schedule and $17 billion over budget.
Now, Georgia Power said it will will pay $413 million to Oglethorpe, according to AP, which reported the company will also replace “one of four the four massive fuel pumps that cools the Unit 4 reactor,” though it previously claimed an identified issue with the pump was an “isolated event.”
The first payment of $241.2 million will be made by Georgia Power this week. The company agreed to pay the $99 million Oglethorpe was owed, $5 million in interest, and will pay 66 percent of the company’s operating cost above $19.2 billion, which AP notes is projected to total $346.3 million.
Though Georgia Power previously reported that the fuel loading process of Unit 4 had begun in August, the company said the settlement’s requirement to replace a fuel pump would delay power production at Unit 4 until the company’s fallback date of March 2024.
Georgia Power’s parent company, the Atlanta-based Southern Co., is set to write off a $152 million loss after the settlement.
Georgia Power owns a myriad of power generation assets, including coal, gas, hydroelectric, nuclear, oil, and solar facilities. In 2022, Georgia Power reported about 48 percent of its energy came from gas and oil, 23 percent from nuclear, 15 percent from coal, and 14 percent from hydroelectric or renewable energy sources. Since 2021, the company has become more dependent on gas and oil for its energy generation, but also increased reliance on nuclear energy. The company reported more than 2.7 million customers.
The company co-owns two nuclear facilities, Plant Vogtle and Plant Hatch near Baxley. Combined, in 2021, the two plants provided about 20 percent of the electricity used in Georgia, and Unit 3 of Plant Vogtle became fully operational on July 31.
Customers of the Georgia Power saw their rates increase by as much as 12 percent in June, when Georgia’s utility regulators approved the boost to compensate for the higher cost of fuel that will see rates continue to increase until 2026. Georgia Power had previously sought to increase rates for customers last December, when it successfully gained approval to increase rates by about $1.8 billion over three years.
The company claimed it will end 2023 with $4.5 billion in debt due to the increased cost of fuel in 2022, prompting the higher rates for Georgia customers.
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Tom Pappert is the lead reporter for The Georgia Star News and a reporter for the Arizona Sun Times. Follow Tom on X/Twitter. Email tips to [email protected].
Photo “Plant Vogtle” by Georgia Power.
