Case 1:18-cv-04295-MHC Document 1 Filed 09/11/18 Page 1 of 22

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
MUNICIPAL ELECTRIC AUTHORITY
OF GEORGIA
Plaintiff,
v.
JEA
Defendant.
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CIVIL ACTION FILE
NO.
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COMPLAINT FOR DECLARATORY JUDGMENT
AND BREACH OF CONTRACT
This lawsuit arises from a Power Purchase Agreement (“PPA”) that supports the ongoing
construction of Units 3 and 4 (the “Additional Units”) of the Alvin W. Vogtle Electric Generating
Plant in Waynesboro, Georgia (“Plant Vogtle”), which has been undertaken by four power
providers in Georgia: Plaintiff Municipal Electric Authority of Georgia (“MEAG Power”), the
Georgia Power Company (“Georgia Power”), Oglethorpe Power Corporation (“Oglethorpe”) and
the City of Dalton, Georgia (“Dalton”) (collectively, the “Co-Owners”). MEAG Power’s
ownership is structured as three separate projects: one to sell power to the municipalities it serves
(“Project M”); one to sell to PowerSouth Energy Cooperative (“Project P”); and a third to sell
power to Defendant Jacksonville Energy Authority (“JEA”) (“Project J”). Sales to PowerSouth
and JEA are each governed by a Power Purchase Agreement (“PPA”).
Certain recent disclosures of unanticipated costs by Georgia Power have triggered a vote
among the Co-Owners as to whether to continue the construction of the Additional units or cease
construction. That vote is scheduled for September 24, 2018.
JEA has demanded that MEAG Power vote to discontinue construction, although MEAG
Power has duties to PowerSouth and to its participant cities and cannot base its vote solely on

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JEA’s perceived interests. Despite the fact that there has been no vote yet and not all the facts are
known, JEA has indicated a clear intent to breach its contract, abandon its obligations, undermine
MEAG Power’s ability to perform, and attempt to force MEAG Power’s hand in the vote. JEA
has already commenced taking actions designed to undermine and disrupt MEAG Power’s internal
process and the Co-Owner vote, and to force termination of construction of the Additional Units.
In correspondence with MEAG Power, JEA has clearly stated that it believes the PPA is
unenforceable and it intends to immediately exit the PPA.
In addition to casting doubt on the Project J PPA, JEA’s actions are breach of its contractual
obligations under the PPA, both because they breach JEA’s duty to cooperate with MEAG and
because they effectuate an anticipatory repudiation of the contract. MEAG Power therefore
respectfully asks the Court for declaratory judgment as to the rights and obligations of the parties
and injunctive relief preventing further such breaches.
Without such relief, MEAG Power and the 49 Georgia communities who participate in
MEAG Power projects face serious and irreparable injury, including, potentially: the inability to
finance and complete construction of Vogtle Units 3 and 4, declaration of payment default as to
loans backed by the U.S. Department of Energy (“DOE”), an increase of expense in financing, and
diminishment of and severe harm to MEAG Power’s access to credit.
PARTIES, JURISDICTION AND VENUE
1.

Plaintiff MEAG Power is a public corporation and instrumentality of the state of

Georgia. MEAG Power was created by the Georgia General Assembly in 1975 to acquire or
construct, and to operate and maintain, electric generation and transmission facilities. MEAG
Power’s headquarters are located at 1470 Riveredge Parkway NW, Atlanta, Georgia 30328.
MEAG Power’s projects benefit 49 communities in Georgia, which are called “Participants.” The
Participants are the cities of Acworth, Adel, Albany, Barnesville, Blakely, Brinson, Buford, Cairo,
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Calhoun, Camilla, Cartersville, College Park, Commerce, Covington, Crisp County, Doerun,
Douglas, East Point, Elberton, Ellaville, Fairburn, Fitzgerald, Forsyth, Fort Valley, Grantville,
Griffin, Hogansville, Jackson, LaFayette, LaGrange, Lawrenceville, Mansfield, Marietta, Monroe,
Monticello, Moultrie, Newnan, Norcross, Oxford, Palmetto, Quitman, Sandersville, Sylvania,
Sylvester, Thomaston, Thomasville, Washington, West Point, Whigham, and Crisp County. These
Participants encompass a service area population of 634,000 Georgia citizens. Each Participant is
a Georgia resident.
2.

JEA is a publicly-owned electric, water, and wastewater (sewer) utility and an

independent agency of the City of Jacksonville, Florida. By service population, JEA is the eighth
(8th) largest municipal utility in the United States. JEA’s principal place of business located in
Jacksonville, Florida. Each member or participant in JEA is a Florida resident.
3.

This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.

§ 1332(a)(1). Plaintiff MEAG Power and Defendant JEA are citizens of different states and the
amount in controversy exceeds the jurisdictional minimum of $75,000.
4.

This Court also has jurisdiction under 28 U.S.C. § 2201 (Declaratory Judgment

5.

Venue in this District is appropriate because JEA subjected itself to the jurisdiction

Act).

of this Court by executing the contract at issue, the Power Purchase Agreement between Municipal
Electric Authority of Georgia as Seller and JEA as Buyer, as amended and restated on December
31, 2014 (the “PPA”), wherein the parties agreed that:
Each party irrevocably submits to the jurisdiction and venue of the Superior
Court of Fulton County, Georgia and the U.S. District Court for the Northern
District of Georgia in any dispute arising out of or related to this Agreement,
and hereby irrevocably agrees that all claims in respect of such dispute may
be heard and determined in the Superior Court of Fulton County, Georgia
and the U.S. District Court for the Northern District of Georgia.
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PPA § 1003. (The PPA is attached as Exhibit A.) The parties further agreed that “the Superior
Court of Fulton County, Georgia or the U.S. District Court for the Northern District of Georgia”
are “the sole legally binding forums available to the Parties for resolution of a dispute hereunder.”
PPA § 801. Those two courts therefore have exclusive jurisdictions for these claims.
FACTUAL BACKGROUND
MEAG Power’s Reliance on JEA Power Purchase Agreement
6.

MEAG Power is a partial owner of Units 1 and 2 of Plant Vogtle, along with

Georgia Power, Oglethorpe, Dalton. Construction for those original two units was completed in
1989. The construction of those units was significantly over budget and delayed, but today those
units are MEAG Power’s lowest-cost base load generation assets.1
7.

As a Co-Owner, MEAG Power had a right to participate in up to 22.7% ownership

interest for the construction of two more nuclear units at Plant Vogtle—the Additional Units,
dubbed Units 3 and 4.
8.

In 2007, when the Co-Owners were deciding whether to pursue construction of

Units 3 and 4, MEAG Power determined that its Participants would need only about 9% of the
Project by the time the two units would come on line, rather than the entire 22.7% share that MEAG
Power was entitle to take.
9.

Although MEAG Power anticipated that the output of Units 3 and 4 in 2017 would

be surplus to the Participants’ near-term needs, it was and is duty-bound to efficiently manage its
electric supply for decades into the future. MEAG Power anticipated the planned retirement of
MEAG Power’s existing nuclear units (two Plant Hatch units in years 2034 and 2037) and its

1

“Base load” is the minimum level of demand on an electrical grid over a span of time, for
example, one week. Base load power sources are power stations which can economically generate
the electrical power needed to satisfy this minimum demand.
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Participants’ anticipated growing needs in the coming decades, as well as adhering to the cardinal
principal of having diversified power generation resources. In order to provide for interim costs
while making the power available to its Participants in the future, MEAG Power pursued long
term, PPAs with other entities (sometimes referred to as “offtakers”) to cover construction costs
and the first twenty years of operation. These “hell-or-high-water” contracts specifically provide
that the buyer has no right, under any circumstances, to abandon the contract or be relieved of its
contractual obligations.
10.

The PPAs sought by MEAG Power were designed to commit the offtakers to pay

for all of the costs related to their share of power, which they would receive for the timeframe
when most of MEAG Power’s Participants did not need the Vogtle Units 3 and 4 output.
Thereafter, upon the expiration of the offtakers’ specified timeframe for taking power, certain
Participants would take the power going forward and pay for it.
11.

By structuring its potential ownership interest in Units 3 and 4 this way, MEAG

Power could take more of an ownership share of Units 3 and 4 than its Participants needed in the
relative short term by shifting the cost and benefit of power from Units 3 and 4 to other purchasers
until a time when MEAG Power’s Participants were anticipated to be in need of a new supply of
carbon-free and reliable power.
12.

MEAG Power undertook a competitive bidding process to select the offtakers,

making clear that only those bidders who agreed to hell-or-high-water contracts would be
accepted. After a competitive bidding process, the two winning bidders were JEA and PowerSouth.
13.

Thereafter, MEAG Power and JEA (and separately, MEAG Power and

PowerSouth) engaged in lengthy contract negotiations, which involved MEAG Power disclosing

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to JEA extensive information, including but not limited to all the pertinent contracts between the
Co-Owners pertinent to the construction, management, and operation of Units 3 and 4.
14.

The result of those negotiations was that on May 12, 2008, JEA executed the PPA,

committing JEA to pay for 100% of its respective project total annual costs, inclusive of all debt
service (principal and interest) and all variable costs for the first 20 years of the Project.
(PowerSouth also executed a PPA on May 12, 2008, which terms are substantially similar to the
JEA PPA. PowerSouth has consistently maintained its support for the construction of the
Additional Units.)
15.

It was only after MEAG Power obtained JEA’s and PowerSouth’s agreement to be

irreversibly obligated for the obligations of their shares of the Project that MEAG Power agreed
to proceed with committing to the other Plant Vogtle Co-Owners that MEAG Power would, in
fact, take 22.7% of the total output of Units 3 and 4. That is, MEAG Power expressly relied on the
contractual commitments of JEA and PowerSouth when agreeing to proceed with a 22.7%
commitment of Units 3 and 4. Had either JEA or PowerSouth not agreed to be obligated for their
shares in hell-or-high-water contracts, committing them to pay, for example, for the cost of
construction even if Units 3 and 4 never produced electricity, MEAG Power would not have agreed
to a 22.7% share and instead would have taken a far smaller share.
16.

Upon obtaining the commitments of JEA and PowerSouth, and further determining

the commitments of its own Participants in the first 20 years and thereafter, MEAG Power divided
its undivided ownership interest in the Project into three wholly-owned, special purpose limited
liability subsidiaries dubbed “Project M” (representing a 33.871% ownership interest or 169.458
MW of nominally rated generating capacity), “Project J” (representing a 41.175% ownership
interest, or 206.000 MW of nominally rated generating capacity), and “Project P” (representing a
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24.955% ownership interest, representing 124.850 MW of nominally rated generating capacity).
JEA’s rights and obligations under the PPA relate to Project J.2
17.

The final ownership structure of the Project is depicted below:

2

PowerSouth’s power purchase agreement rights and obligations pertain to Project P; and certain
MEAG Power Participants have rights and obligations with respect to Project M.
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Contracted Sales of
Output of the Vogtle Units 3&4 Projects 

(all data are approximations)

Page 8 of 22

 

 

Vogtle Units 3&4
Nominally Rated 1,102 megawatts Each (2,204 MW Total)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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GPC 0P0 Dalton MEAG Power
45.7% 30.0% 1.6% 22.7%
(1,007 MW) (661 MW) (35 MW) (500.308 MW)
Project Project Project 
33.871% 41.175% 24.955%
(169.458 MW) (206.000 MW) (124.850 MW)
To 29 Participants To To 
(Project Power (Project PPA) (Project 
Sales Contracts) For the initial twenty For the initial twenty
For the term of the years ofcommercial years of commercial
power sales operation of each of operation of each of
contracts? Vogtle Units 3&4, Vogtle Units 3&4,
respectively, pursuant respectively, pursuant
to a power purchase to a power purchase
agreement agreement
To 39 Participants To 39 Participants
(Project Power (Project Power
Sales Contracts) Sales Contracts)
For the period For the period
subsequent to the subsequent to the
initial twenty years of initial twenty years of
commercial operation commercial operation
of each of Vogtle of each of Vogtle
Units 3&4, Units 3&4,
respectively respectively 


Undivided
Ownership
Interests

(Capacity)

Vogtle
Units 3&4
Projects

Contracted
Sales of
Output and
Services of
the Vogtle
Units 3&4
Projects

Case 1:18-cv-04295-MHC Document 1 Filed 09/11/18 Page 9 of 22

JEA’s Unconditional Obligations Under the PPA
18.

The PPA requires, in relevant part, that for twenty (20) years, JEA make payments

due for all debt service (inclusive of the principal of and interest on each series of bonds and
applicable DOE-guaranteed loans), as well as all variable costs related to the Project, whether or
not the project is completed, is operating or operable or its output is suspended, interrupted,
interfered with, reduced, curtailed or terminated in whole or in part. See PPA Article II generally.
19.

The PPA provides specifically that
[JEA] shall pay its Obligation Share of Plant Vogtle Additional Units PPA
Project Annual Costs whether or not the PPA Project Entity’s Ownership
Interest is completed or is operating or operable, and whether or not its
Output is suspended, interrupted, interfered with, reduced or curtailed or
terminated in whole or in part, and such payments shall not be subject to
reduction, whether by offset or otherwise, and shall not be conditioned upon
the performance or non-performance by any party of any agreement for any
cause whatsoever.

PPA § 204(g).
20.

JEA’s unconditional commitment is reflected in the Recitals to the PPA, wherein

the parties acknowledged that
MEAG [Power] desires to sell the Output . . . of the Plant Vogtle Additional
Units PPA Project for the Term of this Agreement, and [JEA] desires to
purchase such Output predicated upon the understanding that the sale of
the Output by MEAG [Power] to [JEA] will require [JEA] to assume a
proportionate share of the related construction risk.
PPA Recitals (emphasis added).
21.

In order to fund Project J, the PPA authorizes MEAG Power to, among other things,

issue bonds and seek and draw upon DOE loans. See PPA Article IV generally. For the first 20
years of debt service, the security for Project J bonds and DOE loans is dependent on the payment

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obligations owed by JEA under the PPA.3 That is, if JEA were to do anything to undermine or
restrict that security, additional needed bonds and loans would become much more difficult and
expensive to obtain. To obviate such an occurrence, the PPA provides that
This Agreement, on which purchasers of PPA Bonds and DOE shall have
relied as an inducement to purchase and hold the PPA Bonds and to guarantee
the DOE Guaranteed Loan, respectively, shall not be amended, modified, or
otherwise altered in any manner except as provided in this Agreement. So
long as any of the PPA Bonds or the DOE Secured Obligations are
outstanding or until adequate provisions for the payment thereof have been
made in accordance with the provisions of the PPA Project Bond Resolution
and the DOE Loan Documents, respectively, and no undisbursed
commitments remain available under the DOE Loan Documents, this
Agreement shall not be amended, modified, or otherwise altered in any
manner that will (i) reduce the payments pledged as security for the Debt
Service on all the PPA Bonds and as security for the DOE Secured
Obligations or extend the time of such payments provided herein, . . ., or (iii)
in any manner impair or adversely affect the rights of the owners from time
to time of the PPA Bonds or the rights of the DOE Secured Parties pursuant
to the DOE Loan Documents.
PPA § 103(b).
22.

The PPA further provides that “this Agreement shall not be terminated by either

Party under any circumstances.”4 PPA § 103(a).
23.

JEA also expressly acknowledged that Georgia Power had “sole authority and

responsibility for the planning, licensing, design, construction, acquisition, completion, start up,
commissioning, renewal, addition, replacement, modification, and decommissioning” of the
Project, as well as “sole responsibility for the management, control, operation and maintenance”
of the Project. PPA § 601. While the four Co-Owners amended their agreement in 2017 to provide
for votes to continue or halt construction under certain conditions, MEAG Power expressly

3

JEA’s payment obligations extend only through the first twenty years of operation. PPA § 102.

4

Section 103 was conditioned solely on the issuance of a DOE Loan Guarantee Agreement, which
occurred.
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disavowed “any responsibility” and any liability for those matters that fall within “the authority
and responsibility” of Georgia Power. Id. JEA agreed that “any failure” by Georgia Power to
comply with its obligations or otherwise perform, “in whole or in part, shall not excuse [JEA’s]
performance under this Agreement.” Id.
24.

Under the PPA, MEAG Power is obligated to “fully and timely comply with its

obligations under and in connection with,” among other things, “the DOE Loan Guarantee
Agreement and the other DOE Loan Documents, including payment of all costs and compliance
with all financial obligations in such documents.” PPA § 1017.
25.

Finally, the PPA requires that MEAG Power and JEA “shall cooperate with each

other and with each other’s employees and agents by taking all actions necessary to fully
effectuate the intent of this Agreement.” PPA § 1015 (emphasis added).
JEA’s Commitments Were Repeatedly Affirmed by JEA in a Bond Validation in
the Superior Court of Fulton County
26.

In order to raise funds to pay for, among other things, MEAG Power’s acquisition,

construction and operation of electric generating assets, MEAG Power is expressly authorized by
the Georgia Code to issue revenue bonds. O.C.G.A. § 46-3-126(11); O.C.G.A. § 46-3-131. The
issuance of such bonds is subject to a validation proceeding in the Superior Court of Fulton County.
Such proceedings were had in connection with financing raised for Project J in matters styled State
of Georgia v. Municipal Electric Authority of Georgia, Civil Action No. 2008CV159297
(validating the issuance of Project J Bonds in the aggregate principal amount of $6,010,140,000),
State of Georgia v. Municipal Electric Authority of Georgia, Civil Action No. 2009CV179503
(validating a DOE guarantee loan), and State of Georgia v. Municipal Electric Authority of
Georgia, Civil Action No. 2010CV259189 (validating additional funding for Project J and the
December 31, 2014 amended and restated PPA).
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27.

In these validation proceedings, MEAG Power filed a complaint in which the

obligations of JEA under the PPA, as amended and revised, were explained (and the PPA itself
was attached), and JEA filed an answer in which JEA admitted to the full and unconditional
enforceability of the PPA, as amended and revised. The court, upon this record, validated the
bonds and the underlying contracts.
History of the Additional Units Construction Project
28.

The original contractor for the Project was Westinghouse Electric Co. LLC, which

executed a lump sum Engineering, Procurement, and Construction contact for the Project (the
“EPC Contract”). Toshiba Corporation, the parent of Westinghouse, executed a guaranty worth as
much as $3.68 billion, backing Westinghouse’s performance of the EPC Contract.
29.

On March 29, 2017, Westinghouse and certain affiliates filed for Chapter 11

bankruptcy and on July 20, 2017, Westinghouse was authorized to reject the EPC Contract.
Georgia Power, as agent for the Co-Owners and who had sole decision-making responsibility with
respect to the Project, on the basis of extensive cost-to-complete and cost-of-cancellation analyses,
concluded in August 2017 that it was reasonable and prudent to complete the Project, and that the
cost to complete would be less than the cost of cancellation. Using Georgia Power’s data on the
cost to complete, MEAG Power undertook its own system-level analysis. The conclusion of that
analysis was consistent with Georgia Power’s decision to complete the Project. In summer 2017,
MEAG Power shared these analyses, as well as all other Project-based information to which it had
access, with JEA.
30.

On September 28, 2017, MEAG Power received an additional commitment from

the DOE with respect to additional financing for each of its three Vogtle Projects, including the
Additional Units.

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31.

In December 2017, Toshiba honored its guaranty of the EPC Contract and paid to

the Co-Owners the entirety of the Toshiba Parent Guaranty, totaling $3.68 billion, reducing the
total cost of the Project to the Co-Owners.
32.

In January 2018, the Georgia Public Service Commission (“PSC”), after five

months of proceedings that involved the intervention of scores of entities (including JEA and
MEAG Power), extensive briefing and written testimony, and days of oral testimony and cross
examination of and by the parties, the intervenors, and the public, approved Georgia Power’s
decision to complete the Project in light of the Westinghouse bankruptcy, notwithstanding the
delays and increased costs.
The Co-Owners Re-Negotiated Their Agreement
to Provide for Cancellation by Vote
33.

In November 2017, the four Co-Owners amended their agreement. Georgia Power

would continue to oversee all aspects of construction, with the other Co-Owners exercising a
simple yes-or-no vote as to continued construction in the event of certain triggering events,
including certain budget overages. An affirmative vote of 90% or more of the ownership interests
(in practice, all Co-Owners other than Dalton) would be required to continue construction.
34.

In August 2018, Georgia Power announced that the budget for the Project would

need to be revised upward by over $2 billion, triggering such a vote on continuation. If the CoOwners vote to proceed with construction of the Project, MEAG Power will need to raise
additional financing to pay for its share of the construction costs related to Project J (as well as the
other MEAG projects).

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JEA’s Disavowal of the Project
and Its Acts to Undermine MEAG Power’s
Relationship With DOE, Others
35.

In November 2017, JEA’s Board of Directors discussed the prospect of selling

JEA’s assets to a private firm. JEA commissioned a study of such a possible sale. In a report dated
February 14, 2018, that study concluded that such a sale “could produce substantial up-front net
proceeds to” the City of Jacksonville, and ended with a recommendation that Jacksonville’s leaders
“evaluate and weigh” the possibility, through “an updated valuation of JEA” and “perhaps an
exploratory sale process.”
36.

In late 2017 and early 2018, JEA indicated to MEAG Power that it was in favor of

discontinuing the project. JEA wrote to MEAG Power in February 2018 that “it is not in the best
interests of JEA’s ratepayers for the construction of the last and only US nuclear project to continue
and for JEA to continue to be bound by the terms of the PPA.” The letter ended threatening legal
action if a resolution could not be achieved in a February 27, 2018 meeting. Shortly thereafter,
however, JEA reaffirmed that it would meet its obligations under the PPA.
37.

Upon the disclosure by Georgia Power of additional project costs in mid-2018, JEA

renewed its objections to the Project. In a letter to MEAG Power dated August 17, 2018, JEA’s
Interim Managing Director and CEO, Aaron Zahn, stated that it was “JEA’s position that
continuation [of the Project] would violate MEAG’s obligations and common law duties owed to
JEA,” that the case for terminating the Project was “even stronger” than in the fall of 2017, and
that “JEA demands MEAG vote not to continue the project.”
38.

MEAG Power responded in a letter dated August 24, 2018.

MEAG Power

reassured JEA that it would take JEA’s input on the continuation vote; informed JEA that it was
“still in the process of obtaining the necessary data” to complete its analysis of the economics of
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continuation versus cancellation; asked JEA for a copy of the analysis that JEA had independent
commissioned in 2017; reaffirmed that it would make no adverse distinctions between JEA,
PowerSouth, and the Participants in discharging its responsibilities; confirmed that it had taken all
actions available to it to protect all its constituents, including the off-takers; offered to share
information as to estimations of the cost of continuing; and stated MEAG Power’s willingness to
work with JEA to find a solution, while noting that MEAG Power lacked authority to enter into
any arrangement that would increase cost or risk for itself or its Participants.
39.

MEAG Power also noted, however, that JEA’s demand that MEAG Power vote for

cancellation was, in effect, “a demand that we breach our Loan Guarantee Agreements with DOE
which would be an event of default under the Loan Guarantee Agreements and would give DOE
the option to accelerate all of our DOE debt, which would lead to a cross-acceleration of the bonds
issued under our Bond Resolutions related to Project J, Project P and Project M.” MEAG Power
also warned that JEA’s taking that position publicly “could have very deleterious effects,”
including a domino effect that could profoundly injure PowerSouth, the MEAG Participants,
Georgia Power, Oglethorpe, and the City of Dalton.
40.

On September 5, 2018, JEA communicated its position to DOE representatives

regarding its strong desire for the Project to be terminated and construction.
41.

On September 7, 2018, DOE sent MEAG Power a letter stating that DOE would

“evaluate the impact of JEA's recent statements on MEAG's existing DOE-guaranteed
indebtedness within the context of the provisions of the existing loan guarantee agreement with
MEAG, and likewise would evaluate the impact of JEA's actions on additional indebtedness.”

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42.

JEA’s actions have already had their intended effect: to interfere with and

destabilize MEAG Power’s access to credit in order to force MEAG Power’s hand in the upcoming
vote.
COUNT ONE
DECLARATORY JUDGMENT: THE PPA IS ENFORCEABLE
43.

MEAG Power restates and incorporates by reference those allegations set forth in

paragraphs 1 through 42 above, as if set forth fully herein.
44.

MEAG Power is entitled to a declaratory judgment, pursuant to 28 U.S.C.

§ 2201(a), that the PPA is valid and fully enforceable against JEA.
45.

The contract is in all respects valid.

46.

JEA has waived, and is estopped from claiming, any defect in the PPA or its

formation, or that it is not enforceable in any respect. JEA performed under the PPA for years and
never intimated that it was not enforceable. As recently as March 2018 it reaffirmed that it would
continue to perform under the PPA. Additionally, the adjudication of the the validity of the PPA
in bond validation proceedings was and is conclusive and binding, O.C.G.A. § 46-3-132, and JEA
is estopped for that reason as well.
47.

MEAG Power is an interested party because its own investments (which are those

of its Participants) in the Vogtle Plant project depend in part on JEA fullfilling its contractual
obligations to, among other things, make all payments requred under Project J.
48.

There is actual doubt as to JEA’s performance of its obligations under the PPA. On

August 17, 2018, JEA’s CEO announced an intent, if MEAG Power does not vote to terminate the
Project, to “exit the PPA.” JEA argued in its letter that a vote to continue would be a failure on
MEAG Power’s part “to meet its obligations under the PPA.”

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49.

JEA’s position and its declaration that it will not abide by the terms of the contract

create an imminent threat, because the Co-Owners’ vote is scheduled to be held on September 24,
2018.
50.

A substantial, justiciable and actual controversy exists between MEAG Power and

JEA, and MEAG Power’s contractual rights in the PPA are threatened and uncertain, because JEA
has expressed doubt about the continued enforceability of the PPA.
51.

Because JEA has threatened to ignore its obligations under the contract, MEAG

Power’s interests are at risk if JEA does not perform under the contract. JEA’s actions in denying
the enforceability of the PPA have already created uncertainty in in MEAG’s ability to fulfill its
own obligations under the PPA, as well as uncertainty in determining whether to proceed or cancel
the Vogtle Project. MEAG has been forced to expend money, time, and attention to deal with that
uncertainty. The controversy between the parties is substantial, justiciable, and actual. MEAG
Power is entitled to declaratory relief and direction from the Court that MEAG Power has
performed under the PPA, that no Co-Owner vote by MEAG Power would be a breach of the
contract, and that the entirety of the PPA continues to be fully enforceable against JEA, and will
continue to be regardless of the vote.
COUNT TWO
BREACH OF CONTRACT: DUTY TO COOPERATE
52.

MEAG Power restates and incorporates by reference those allegations set forth in

paragraphs 1 through 51 above, as if set forth fully herein.
53.

Section 1015 of the PPA requires that “[t]he Parties shall cooperate with each

other and with each other’s employees and agents by taking all actions necessary to fully
effectuate the intent of this Agreement . . . .” (emphasis added).

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54.

The intent of the PPA, as manifested by the explicit language agreed to by the

parties, included that MEAG Power would use DOE loans to finance the Project, and that it should
“fully and timely comply with its obligations under . . . the DOE Loan Guarantee Agreement and
the other DOE Loan Documents, including payment of all costs and compliance with all financial
obligations in such documents.” PPA §§101, 1017.
55.

The intent of the PPA was also that MEAG Power would “not make any adverse

distinction in connection with discharging its responsibilities” as between JEA, PowerSouth, and
the Participant cities.”
56.

JEA’s actions are already hindering MEAG Power’s ability to carry out those

obligations by interfering with its ability to continue to borrow under the DOE program. An
inherent aspect of the PPA is that MEAG Power must be able to access capital markets and other
sources of funding in order to satisfy its obligations under the PPA and the Co-Owners’
agreements.
57.

JEA’s threats to imminently “exit” the PPA, and to take legal action to avoid its

obligations under the PPA, hinder MEAG Power’s ability to effectuate the intent of the PPA by
depriving it of access to sources funding, as well as hindering MEAG Power’s ability to fully and
timely comply with the terms of its DOE loans.

Such threats, by introducing instability,

uncertainty, and risk, are a failure to a cooperate, regardless of whether the threat is carried out.
58.

JEA’s actions also hinder MEAG Power’s ability to discharge its responsibilities

without adverse distinctions among its contractual counterparties. Indeed, the entire thrust of
JEA’s recent actions is to attempt to force MEAG Power to only take into account JEA’s desires
and interests and ignore the interests of PowerSouth and the Participant cities.
59.

JEA’s actions violate its duties under Section 1015.
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60.

JEA’s actions in failing to cooperate in fulfilling the intent of the PPA have already

created uncertainty in in MEAG’s ability to fulfill its own obligations under the PPA, as well as
uncertainty in determining whether to proceed or cancel the Vogtle Project. MEAG has been
forced to expend money, time, and attention to deal with that uncertainty. If allowed to continue,
JEA’s actions will cause MEAG Power and its constituents grave, immediate, and irreparable harm
that could not be adequately remedied by damages, including, but not limited to, loss of access to
credit that is needed in a timely fashion for MEAG Power to avoid defaulting or otherwise
breaching its own contractual and statutory duties.
61.

MEAG Power is therefore entitled to declaratory relief stating that JEA’s actions

are in breach of the PPA, as well as a specific performance order requiring JEA to cooperate with
MEAG Power in effectuating the intent of the contract. The remedy of specific performance is
contemplated by the contract, as discussed in more detail below.
COUNT THREE: SPECIFIC PERFORMANCE
62.

MEAG Power restates and incorporates by reference those allegations set forth in

paragraphs 1 through 61 above, as if set forth fully herein.
63.

MEAG Power is entitled to seek specific performance to remedy JEA’s breaching

conduct.
64.

Under Georgia law, “[s]pecific performance of a contract, if within the power of

the party, will be decreed, generally, whenever the damages recoverable at law would not be an
adequate compensation for nonperformance.” O.C.G.A. § 23-2-130. Here, damages would not be
adequate to compensate MEAG Power for JEA’s threatened nonperformance. The Plant Vogtle
Project is a vast, years-long nuclear power project funded by complex, interlocking investments
and commitments. The nature of the business requires MEAG Power not only to receive timely
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payments from contractually-commited offtakers like JEA, but to depend on those buyers’ full
support and continued participation while raising funds in the market in the future. If JEA were
allowed to exit the project, notwithstanding the hell-or-high-water contract that it signed, funding
for Project J may fail or become difficult to obtain. This would affect the completion of the Project
and thereby potentially cause harm to PowerSouth, the MEAG Participant cities, Georgia Power,
Oglethorpe, and Dalton, as well as MEAG Power itself.
65.

Furthermore, specific performance is an appropriate remedy regardless of whether

the breach is viewed under the UCC or under Georgia common law. O.C.G.A. § 11-1-103 (“Unless
displaced by the particular provisions of this title [the UCC], the principles of law and equity . . .
shall supplement its provisions.”); Jay Cty. Rural Elec. Membership Corp. v. Wabash Valley
Power Ass'n, Inc., 692 N.E.2d 905, 913 (Ind. Ct. App. 1998) (noting that “under certain
circumstances, specific performance on behalf of the seller has been permitted [under the UCC],
as where payment was to be made in a particular manner, and the remedy at law was inadequate”)
(quoting Central Illinois Public Service Co. v. Consolidated Coal Co., 527 F.Supp. 58, 65 (C.D.
Ill. 1981), and 67 Am.Jur.2d § 556)).
66.

Finally, the parties explicitly contemplated specific performance as an appropriate

remedy when drafting the PPA. Section 501 of the PPA states that MEAG may seek specific
performance in the event of non-payment or “failure to comply with any other covenant,
agreement, representation, warranty or obligation of this Agreement.” Thus, the remedy of specific
performance is not prohibited by, and indeed is expressly contemplated by, the PPA.
67.

MEAG Power thus asks that this Court order specific performance from JEA as

follows:

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a. That JEA take all Output (as defined in the PPA) made available to it under the
Agreement;
b. That JEA use all Output in compliance with the terms of the PPA;
c. That JEA make all payments to MEAG Power as and when required by the terms
of the PPA;
d. That JEA not take any actions which will breach its obligations under the PPA,
including but not limited to, its obligation to support MEAG’s ability to obtain
financing for the Project, and its obligations to make all payments required under
the Agreement;
e. That JEA cooperate with MEAG Power as required by the PPA in connection with
the ongoing and future financing of Project J;
f. That JEA rescind its August 17, 2018 letter;
g. That JEA, in all other ways, act in strict compliance with the terms of the
Agreement, and do nothing to threaten the continued financing of the project.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for:
1.

A final declaration and decree that the PPA is lawful and enforceable;

2.

Grant of the specific performance requested;

3.

Entry of the injunctive relief in the form requested;

4.

An award of damages;

5.

An award of reasonable attorneys’ fees, costs, and expenses; and

6.

Such other and further relief as the Court deems just and equitable.

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Respectfully submitted this 11th day of September, 2018.

/s/ Rebecca Woods
Rebecca Woods
Georgia Bar No. 942321
Seth Fortin
Georgia Bar No. 759830
SEYFARTH SHAW LLP
1075 Peachtree Street, N.E., Suite 2500
Atlanta, Georgia 30309-3962
Telephone: (404) 885-1500
Facsimile: (404) 892-7056
Michael Levinson
(pro hac application to be filed)
SEYFARTH SHAW LLP
233 South Wacker Drive, Suite 8000
Chicago, Illinois 60606-6448
Phone: (312) 460-5000
Fax: (312) 460-7000
Attorneys for Plaintiff

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