Oglethorpe facing potential $280m Vogtle suit liability

Oglethorpe Power said in a Nov. 13 financial filing that it could face a potential liability of $280m in connection with litigation that contractors Shaw Group (NYSE: SHAW) and Westinghouse Electric have brought against owners of the Vogtle nuclear units 3 and 4 under construction in Georgia.

The Shaw, Westinghouse group serve as engineering, procurement and construction (EPC) contractors for the project.

Development of the first two nuclear units approved by the Nuclear Regulatory Commission (NRC) in more than 30 years is being led by Southern (NYSE: SO) subsidiary Georgia Power along with Oglethorpe,  the Municipal Electric Authority of Georgia (MEAG) and the City of Dalton, Ga.

Georgia Power is the largest owner with nearly 46% of Vogtle Units 3 and 4. Georgia Power faces a potential liability of $425m in the litigation, a company spokesman said Nov. 15.

As for Oglethorpe it is a 30% owner in the two new Westinghouse AP1000 units being developed at the site near Waynesboro, Ga. Oglethorpe’s share represents about 660 MW of total capacity, Oglethorpe said in its filing with the U.S. Securities and Exchange Commission.

The SEC filing not that the ownership group and the contractor group sued each other Nov. 1.

 The co-owners filed suit against the Contractor in the U.S. District Court for the Southern District of Georgia. The contractors sued the owners in the U.S. District Court for the District of Columbia.

At issue is who is responsible in delay for getting updated AP1000 design approved by NRC. Oglethorpe’s potential liability is $280m.

Litigation resulted “with respect to certain claims that have not been resolved through the formal dispute resolution process,” Oglethorpe said in its recent SEC filing.

“[B]ased on our ownership interest, the Contractor’s estimated adjustment attributable to us is approximately $280 million in 2008 dollars with respect to these issues. Georgia Power, on behalf of the Co-owners, has not agreed with the amount of these proposed adjustments or that the Co-owners have responsibility for any costs related to these issues,” Oglethorpe said in its filing.

SCANA (NYSE: SCG) has resolved its dispute with the same contractor entities for its V.C. Summer 2 and 3 nuclear units under construction in South Carolina.

 

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.