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MEAG Power

Issuer Type: Power/Gas

Bond Ratings

1 of 8

Project One Senior Lien

Moody's
A1
S&P
A
Fitch
A-

Project One Subordinated Lien

Moody's
A2
S&P
A-
Fitch
BBB+

General Resolution Projects Senior Lien

Moody's
A1
S&P
A
Fitch
A-

General Resolution Projects Subordinated Lien

Moody's
A2
S&P
A-
Fitch
BBB+

Combined Cycle Project

Moody's
A1
S&P
A-
Fitch
BBB+

Vogtle Units 3&4 Project M

Moody's
A2
S&P
A
Fitch
BBB+

Vogtle Units 3&4 Project J

Moody's
Baa3
S&P
A
Fitch
BBB+

Vogtle Units 3&4 Project P

Moody's
Baa2
S&P
BBB+
Fitch
BBB+
Edward E. Easterlin

On behalf of MEAG Power, I would like to welcome you to our investor relations website. We appreciate your interest and investments in MEAG Power bonds. They allow us to make critical investments in public infrastructure throughout our service area.

I hope you find this website useful as you seek to better understand the credit fundamentals of MEAG Power. Please don't hesitate to contact our team with any questions. Thanks again for your interest in our bond program.

Edward E. Easterlin, Senior Vice President and Chief Financial Officer

News & Highlights

June 30, 2020

News
Moody's affirms Baa3 rating on Municipal Electric Authority of Georgia's Plant Vogtle Units 3&4 Project J bonds; changes outlook to positive from negative

The following is a Moody's investor service news release:


Moody's Investors Service has affirmed the Baa3 rating for Municipal Electric Authority of Georgia's (MEAG Power) Plant Vogtle Units 3&4 Project J Bonds, affecting approximately $1.97 billion of outstanding rated debt. Concurrent with the rating affirmation, Moody's has changed the outlook for MEAG Power Project J Bonds to positive from negative.

RATINGS RATIONALE

The rating affirmation and revision of the outlook to positive from negative primarily reflects the significance of the June 17, 2020 federal court ruling by a U.S. District Court judge regarding the validity of the power purchase agreement (PPA) between MEAG Power and JEA, FL - Electric Enterprise (JEA: A2 negative). The court order declared that the PPA between MEAG Power and JEA is valid and enforceable, strengthening the security pledge for the Project J bonds. Moreover, this judicial decision solidifies the legal framework under which JEA is required to make payments to MEAG Power for the first 20 years of the Project J bonds.

For more information:

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June 24, 2020

News
Fitch Removes Rating Watch Negative on MEAG Power Project J Bonds; Outlook Negative

The following is a fitch ratings news release:


Fitch Ratings has removed the Rating Watch Negative on approximately $2.0 billion of Municipal Electric Authority of Georgia's (MEAG Power) Project J bonds following the U.S. District Court's decision that the power purchase agreement (PPA) governing Vogtle project-related payments between JEA and MEAG Power is valid and enforceable. The 'BBB+' rating is affirmed and the Rating Outlook is Negative, reflecting the potential for further weakening in the rating if significant additional cost increases or timing delays occur at the project.

Fitch's rating on the Project J bonds relies explicitly on the PPA with JEA, as well as Fitch's view that the PPA is valid, legal and binding. While the court's decision is subject to appeal upon the completion of remaining monetary relief claims, the legal decision is sufficient support to remove the Rating Watch Negative designation on the bond ratings.

For more information:

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June 18, 2020

Press Release
Federal Court Upholds Vogtle Power Purchase Agreement Between MEAG Power and JEA

MEAG POWER PRESS RELEASE

Media Contact: John Marsh, Communications Manager: jmarsh@meagpower.org; 770-563-0326


U.S. District Judge Mark Cohen granted yesterday MEAG Power’s Motion for Judgment on the Pleadings, specifically declaring in bold print that the power purchase agreement (PPA) between JEA – the electric provider for the city of Jacksonville, Florida – and the Municipal Electric Authority of Georgia (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.

Under the terms of the PPA, which was signed in 2008, and amended and restated in 2014, JEA committed to purchase all of the energy generated by the new units 3 and 4 of the Alvin W. Vogtle Electric Generating Plant (“Plant Vogtle”), as part of Project J, during their first 20 years of operation, as well as to pay for approximately 41 percent of MEAG Power’s share of the construction cost for the new units during those 20 years. JEA also attested to the validity of the PPA in three separate court validation proceedings, fully understanding that the financial community would rely upon such representations in providing funds necessary to finance the Project.

Despite the foregoing, in late 2018, JEA and the City of Jacksonville launched a series of legal and regulatory maneuvers in an attempt to have that agreement invalidated. These included filing a lawsuit in state court in Florida, launching a failed attempt to seek intervention by the Federal Energy Regulatory Commission, and engaging in a costly, misleading public relations campaign against MEAG Power. To defend the agreement and protect the 49 Participant communities it serves, MEAG Power filed counterclaims, including a request to change jurisdiction to the U.S. District Court for the Northern District of Georgia, where the dispute has now been decided in MEAG Power’s favor.

“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.”

In their lawsuit, the City and JEA leveled a lengthy series of claims regarding the legality of the agreement. In his 53-page order, Judge Cohen rejected each of these claims in turn.

“We look forward to Vogtle units 3 and 4 coming into service as planned in 2021 and 2022, respectively,” Fuller said. “We will continue to honor all of our commitments, as we always have, and are hopeful that this ruling puts this matter behind us.”

Plant Vogtle Units 3 & 4 consists of two 1,100 MW Westinghouse AP1000 nuclear reactors being constructed in Burke County, Ga. MEAG Power’s co-owners in the Vogtle expansion project are Georgia Power (45.7 percent), Oglethorpe Power (30.0 percent) and Dalton Utilities (1.6 percent).

About MEAG Power

The Municipal Electric Authority of Georgia (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.

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