Municipal Electric Authority of Georgia (“MEAG Power”) Project J bonds' (A3 Stable) credit profile primarily reflects the credit quality of JEA, FL - Electric Enterprise (JEA: A1 Stable). JEA is the sole source of revenues to pay principal and interest on each series of MEAG Power Project J bonds for the first 20 years.

The MEAG Project J Bond rating also considers the significance of the favorable federal court ruling in June 2020 by a U.S. District Court judge on the validity of the power purchase agreement (PPA) between MEAG Power and JEA and the settlement of prior related litigation between the parties to the PPA. The court order, which declared that the PPA between MEAG Power and JEA is valid and enforceable, solidifies the legal framework under which JEA makes payments to MEAG Power, and removes any prior uncertainty that prevailed regarding the enforceability of the PPA, which is the sole security for the first 20 years of the Project J bonds. Project J bonds debt service will be borne by 39 of MEAG’s municipal participants (the Project J participants) following the end of the 20th year of the take or pay contract term with JEA.

These positive developments for Project J continue to be tempered by the ongoing construction related delays and significant cost overruns associated with the Vogtle Nuclear Power Plant Units 3 and 4. The Vogtle construction completion is now expected to extend at least into Q1 2023 and Q4 2023 for Vogtle Units 3 and 4, respectively.

The rating recognizes Vogtle project's revised co-owner agreement, which includes provisions whereby the Vogtle 3 & 4 co-owners have a one-time option to tender a proportionate share of their ownership interest to Georgia Power Company (GPC, Baa1 issuer rating, stable) in exchange for GPC’s agreement to pay 100% of such co-owners remaining share of construction costs should overall cost increases exceed a certain threshold. This mechanism limits Project J’s exposure to cost increases and provides a degree of downside protection for MEAG’s participants.