COVINGTON -- The Municipal Electric Authority of Georgia, or MEAG Power, announced this week that it has a conditional commitment from the U.S. Department of Energy for approximately $1.8 billion in loan guarantees toward construction of its share of two new units at Plant Vogtle in Burke County, the first expansion of nuclear power in the United States in more than 30 years.
President Barack Obama and Secretary of Energy Steven Chu announced the commitment Wednesday at a news conference in Lanham, Md., at the International Brotherhood of Electrical Workers Local 26.
The city of Covington has invested in the project through its partnership with MEAG.
The city has been allocated about 26 megawatts of power. The first reactor is set to go online in 2016, with the second to follow in 2017. The city's investment amounts to $102.4 million in today's dollars or $162.8 million in "2017 dollars," Mayor Kim Carter has said.
In addition to meeting residents' future power demands, the city's participation "helps stabilize the cost of power in the future," Utilities Director Bill Meecham previously told the Citizen.
Thirty-nine other communities, including the city of Mansfield, have also signed on to participate. Mansfield will purchase .309 megawatts.
MEAG Power plans to issue approximately $2.48 billion Build America Bonds and $54 million tax-exempt bonds to fund a significant portion of capital expenditures related to the additional units at Plant Vogtle. Debt will be sold in three separate MEAG Power credits, each secured by a different combination of off-take contracts with JEA, Power South Energy Cooperative and/or existing MEAG power participants. Bonds are expected to amortize 2017 through 2057.
"It will be a while before we know the impact of the government's latest financial steps. They certainly should help and we welcome them," Meecham said. "The only projection we have thus far is MEAG's belief that the Build America bonds will reduce financing cost over the life of the project, not just the next few years ... This is a projected impact on MEAG as a whole, not just one city. These bonds are anticipated but not yet a done deal."
MEAG will have a 22.7 percent ownership in the nuclear units at a cost of approximately $3.1 billion. MEAG Power is a co-owner along with Georgia Power, Oglethorpe Power and the city of Dalton.
MEAG entered into 20-year sales contracts with JEA and PowerSouth Energy Cooperative, two consumer-owned electric utilities located in Jacksonville, Fla., and Andalusia, Ala. MEAG will sell about 40 percent of its share of the output in the proposed nuclear expansion to JEA and approximately 25 percent to PowerSouth Energy Cooperative for a 20-year term.
"We are extremely honored by this vote of support by the administration," said MEAG President and CEO Bob Johnston. "Our 41 participant communities involved in the project can take great pride in the fact that they are playing such a pivotal role in the renaissance of America's nuclear industry."