JEA announced today that it filed a petition for declaratory order with the Federal Energy Regulatory Commission (FERC). The petition requests FERC to recognize the Plant Vogtle power purchase agreement in place between JEA and the Municipal Electric Authority of Georgia (MEAG Power) as subject to the commission’s jurisdiction under the Federal Power Act (FPA). The claim was made on the basis that the agreement involves the interstate sale of electricity from Georgia to Florida, which places the transaction in the jurisdiction of the FERC under Section 201(b) of the FPA.

If the Plant Vogtle power purchase agreement falls under the scope of the FERC, it will also be subject to the FPA’s just and reasonable standards. JEA believes the agreement fails to meet these standards due to continuing cost increases and completion delays. Initially expected to cost $9.5 billion in direct costs ($14.8 billion total after including indirect and financing costs) in 2008, the total cost-to-completion estimates have increased to more than $30 billion, with no guarantee the amount will not rise again.

“This agreement revolves around wholesale, interstate commerce of electricity, so it should be evaluated by FERC to determine if it meets FPA standards,” said JEA Interim Managing Director and CEO Aaron Zahn. “Exorbitant cost overruns and continued delays, all of which are being shouldered by ratepayers across the Southeast, suggest that the Plant Vogtle expansion project is no longer just and reasonable, let alone consistent with prudent utility practices.”

The petition acknowledges that both JEA and MEAG Power are public entities that are generally exempt from FERC regulation, but that exemption applies only to activities that are intrastate in nature. The Plant Vogtle power purchase agreement involves interstate commerce and thus should be subject to FERC regulation.

JEA is not seeking a finding that the FPA applies to any other public entity or that any transaction other than this specific Plant Vogtle power purchase agreement falls within the scope of the FPA. The petition does not seek a blanket declaration of jurisdiction on any other Plant Vogtle power purchase agreements or wholesale transaction of electricity between any other public entities or parties. JEA’s claim is expressly tailored to the specific facts and unique circumstances associated with the power purchase agreement in place with MEAG Power.

JEA entered into the power purchase agreement in 2008. The power provided under the agreement was to be from two new Plant Vogtle units – Unit 3, which would complete construction in April 2016, and Unit 4, which would complete construction in April 2017. The new units would provide power to JEA customers in addition to ratepayers across Georgia.

Today, the project’s cost-to-completion estimates have increased to more than $30 billion, with no guarantees that costs could grow beyond that, and delayed completion dates of November 2021 for Unit 3 and November 2022 for Unit 4. 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 from $1.4 billion to more than $2.9 billion – an uncapped and rising amount.

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.