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Southern Co., Westinghouse Sue Each Other Over Plant Cost

A Southern Co. (SO) unit and Westinghouse Electric Co. sued each other over at least $900 million in costs associated with construction of a nuclear power plant in Waynesboro, Georgia.

Westinghouse filed its case in federal court in Washington, claiming that Georgia Power Co., a subsidiary of Atlanta-based Southern, violated a contract by refusing to pay for more than $900 million in additional costs due to U.S.-mandated changes. Georgia Power sued in federal court in Augusta, Georgia, saying Westinghouse’s designs for the units at the Vogtle Electric Generating Plant were inadequate.

Tom Fanning, Southern’s chief executive officer, said in a telephone interview today that the litigation will not “have a material impact” on the $14 billion project. The two sides have resolved “lots of minor commercial issues,” he said.

Westinghouse and Shaw Group, a contractor acting as project manager and supplier, haven’t completed a construction schedule for the nuclear reactors, the first to be licensed in the U.S. since the 1970s, because of the dispute.

Southern earlier notified Georgia regulators that Vogtle’s first reactor would come online in November 2016, about seven months later than planned.

“Pending resolution of this, there will be other adjustments as we go forward,” Fanning said today.

The Washington case is Stone & Webster v. Georgia Power Co., 12-cv-01783, U.S. District Court, District of Columbia (Washington). The Georgia case is Georgia Power Co. v. Westinghouse Electric Co., 12-cv-00167, U.S. District Court, Southern District of Georgia (Augusta).

To contact the reporters on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net; Julie Johnsson in Chicago at jjohnsson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net; Susan Warren at susanwarren@bloomberg.net.

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