Jacksonville, FL (Sept. 12, 2018) – JEA and the City of Jacksonville announced that they filed a complaint in Florida state court for declaratory judgment on a power purchase agreement in place with the Municipal Electric Authority of Georgia (MEAG Power) associated with the expansion project at Plant Vogtle, a nuclear power generating facility 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 – an uncapped and rising amount.
The complaint for declaratory judgment seeks to clarify the validity of the amended purchase power agreement, which was never approved by the Jacksonville City Council. JEA and the City of Jacksonville believe the agreement violates the Constitution of the State of Florida and should be declared “ultra vires,” that is, void and unenforceable. The suit was filed in an effort to protect JEA’s ratepayers by continuing to deliver the most affordable power possible.
“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,” said JEA Interim CEO and Managing Director Aaron Zahn. “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 on Sept. 11, the same day that MEAG Power filed a breach of contract lawsuit against JEA in the Federal Court for the Northern District of Georgia.
JEA is the eighth-largest community-owned electric utility in the United States and one of the largest water and sewer utilities in the nation providing electric, water and sewer service to residents and businesses in northeast Florida.