Seyfarth Secures Landmark Litigation Win for Municipal Electric Authority of Georgia

ATLANTA (June 24, 2020) – Seyfarth successfully secured a landmark decision for the Municipal Electric Authority of Georgia (MEAG Power) in a dispute over the power purchase agreement (PPA) for its multi-billion Plant Vogtle nuclear power plant expansion (Project J).

Last week, U.S. District Judge Mark Cohen granted MEAG Power’s Motion for Judgment on the Pleadings, specifically declaring in bold print that the PPA between JEA – the electric provider for the city of Jacksonville, Florida – and MEAG Power “is VALID AND ENFORCEABLE” and that “the PPA unconditionally requires JEA to pay MEAG for capacity and energy at the full cost of production of Project J, including debt service on the bonds and DOE-guaranteed loans”. The ruling confirms the merits of MEAG Power’s position on this matter while avoiding a prolonged and costly trial.

In late 2018, JEA and the City of Jacksonville launched a series of legal and regulatory maneuvers in an attempt to have the PPA invalidated. These included filing a lawsuit in state court in Florida and launching a failed attempt to seek intervention by the Federal Energy Regulatory Commission. In their lawsuit, the City and JEA leveled a lengthy series of claims regarding the legality of the PPA. To defend the agreement, the Seyfarth litigation team built upon the firm’s deep experience in Georgia’s public finance bond validation process and, collaborating with co-counsel Orrick, Herrington & Sutcliffe, filed counterclaims on behalf of MEAG Power. The litigation team also requested to change jurisdiction to the U.S. District Court for the Northern District of Georgia, where the dispute was moved and ultimately decided in MEAG Power’s favor. In his 53-page order, Judge Cohen rejected JEA’s challenge to the enforceability of the PPA.

“From the beginning, we have simply argued that the PPA is valid and fully enforceable, and that the suit brought by JEA and the City of Jacksonville was meritless,” said MEAG Power President and Chief Executive Officer James E. Fuller. “Judge Cohen’s ruling was very thorough and perfectly clear – JEA and the City of Jacksonville knew what they were doing when they entered into this agreement, and they have to honor their commitment.”

Plant Vogtle Project J consists of two 1,100 MW Westinghouse AP1000 nuclear reactors being constructed in Burke County, Ga. MEAG Power’s co-owners in the expansion project are Georgia Power (45.7 percent), Oglethorpe Power (30.0 percent) and Dalton Utilities (1.6 percent).

MEAG Power is a nonprofit, statewide generation and transmission organization. Recognized as one of the leading joint action agencies in the country, MEAG Power is among the top public power companies nationwide in terms of annual net generation, megawatt-hour sales and electric revenue. Its diverse, clean energy portfolio – delivering 67% emissions-free energy in 2019 – compares favorably with both the state and national averages. Created by the Georgia General Assembly in 1975, MEAG Power provides reliable, competitive wholesale electricity to its 49 member communities (Participants), who own their local distribution systems, through take-or-pay contracts. MEAG Power also monitors and advocates on energy issues at the state and federal levels on behalf of its Participants.

The Seyfarth team was led by Litigation partners Rebecca Woods (Atlanta) and Michael Levinson (Chicago), and included Corporate partners Kevin Brown and Steven Richman in Atlanta.