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MEAG's Vogtle PPAs remain intact despite Westinghouse bankruptcy

After Westinghouse Electric Co. LLC filed for bankruptcy March 29, a co-owner of one of its delayed nuclear projects in Georgia, the Municipal Electric Authority of Georgia, said its power purchase agreements with a cooperative and public utility remain intact.

Although agreements were reached with the owners of the Alvin W. Vogtle Nuclear Plant and V.C. Summer projects for Westinghouse to continue building new reactors, analysts have raised the possibility of Southern Co. and SCANA Corp. abandoning construction.

But these developments haven't interrupted Vogtle's power purchase agreements with two utilities, MEAG said.

MEAG is one of four Vogtle co-owners, possessing a 23% stake in the two under-construction reactors alongside Georgia Power Co., Oglethorpe Power Corp. and Dalton Utilities. Two utilities, JEA, the Jacksonville, Fla., public utility and PowerSouth Energy Cooperative, a generation and transmission cooperative headquartered in southern Alabama, entered into agreements to purchase power from MEAG's Vogtle stake, with JEA contracting 206 MW over a 20-year period and PowerSouth receiving 125 MW for the same duration, according to SNL Energy data.

Paul Warfel, MEAG's director of government and corporate affairs, said in an email that his utility has been in touch with JEA and PowerSouth to discuss the status of the PPAs and they are "still intact."

When asked if MEAG has any contingency plans for either delays or abandonment at Vogtle, Warfel wrote that the utility "will continue to monitor and evaluate developments related to Vogtle Units 3&4 and will endeavor to undertake a course of action that MEAG Power believes will advance the long-term interest of MEAG Power, JEA, PowerSouth and the Vogtle Units 3&4 participants."

"The ultimate outcome of the matters discussed above cannot be determined at this time," Warfel added.

JEA's CEO told S&P Global Market Intelligence in March that its decision to retire the fourth-largest coal plant in Florida hinges in part on plans to replace some of the capacity through its PPA with Vogtle.

JEA spokeswoman Gerri Boyce said in an email that JEA "does not anticipate" the Westinghouse bankruptcy having any impact on the shutdown schedule of the 1,276-MW St Johns River Power plant, which is due for dismantlement early next year.

Georgia Power said it is undertaking a review of the costs and time necessary to complete the two new reactors.

"While we are working with Westinghouse to maintain momentum at the site, we are also currently conducting a full-scale schedule and cost-to-complete assessment to determine what impact Westinghouse's bankruptcy will have on the project and we will work with the Georgia Public Service Commission and the Co-owners to determine the best path forward," company spokesman Jacob Hawkins wrote. "We will continue to take every action available to us to hold Westinghouse and Toshiba accountable for their financial responsibilities under the engineering, procurement and construction (EPC) agreement and the parent guarantee."

Westinghouse is a subsidiary of Toshiba Corp.

SNL Energy is an offering of S&P Global Market Intelligence.