Summary
Southern Company's subsidiary, Georgia Power, has reached a settlement with the Municipal Electric Authority of Georgia (MEAG Power) concerning the Plant Vogtle Units 3 and 4 joint ownership agreements. This settlement resolves a significant dispute regarding cost-sharing and tender provisions, where both parties had differing interpretations on cost thresholds and the impact of COVID-19 related expenses. Under the agreement, MEAG Power will not tender its ownership interest and Georgia Power will make payments totaling approximately $76 million, with additional provisions for costs exceeding the current forecast. Importantly, this settlement will not result in an additional charge to income for Georgia Power in the third quarter of 2022, based on the current capital cost forecast. However, this settlement does not extend to disputes with Oglethorpe Power Corporation (OPC) and the City of Dalton, Georgia (Dalton), who have also initiated litigation and notified Georgia Power of their intent to exercise the tender option. Georgia Power faces a remaining potential pre-tax charge exposure of up to approximately $165 million related to these ongoing disputes, the ultimate outcome of which remains uncertain.
Key Highlights
- 1Georgia Power has settled a dispute with MEAG Power regarding the Plant Vogtle Units 3 & 4 joint ownership agreements.
- 2The settlement involves Georgia Power paying approximately $76 million to MEAG Power, based on current project cost forecasts.
- 3MEAG Power will retain its full ownership interest and will not exercise the tender option.
- 4The settlement will not require any additional charge to income for Georgia Power in Q3 2022.
- 5The settlement with MEAG Power does not resolve ongoing disputes with Oglethorpe Power Corporation (OPC) and the City of Dalton.
- 6Georgia Power has a remaining potential exposure of up to approximately $165 million pre-tax related to the unresolved disputes with OPC and Dalton.