A Superior Court judge in Georgia on Friday ruled that the state public service commission acted illegally when it certified Georgia Power’s two proposed Plant Vogtle reactors by failing to properly document justification for the reactors.

Judge Wendy Shoob, who issued the decision from the bench, ruled in favor of environmental group Southern Alliance for Clean Energy (SACE), saying that the Georgia Public Service Commission (PSC) did not provide enough facts to warrant approval of the $14 billion project.

Shoob agreed with SACE’s allegation that the PSC did not provide the required written justifications for its findings that would “afford an intelligent review” by the courts. Among several issues, SACE had claimed that the PSC had not adequately explained why the project’s reactor design of choice—Westinghouse’s AP1000—was a prudent technology when it had never been built anywhere in the world before.

“This ruling spotlights the ongoing incestuous relationship between the Commission and Georgia Power and highlights the regulatory breakdown and blatant lack of consumer protection,” Stephen Smith, SACE executive director, said in a statement on Friday. Smith contended that the court’s ruling could jeopardize the project.

But Georgia Power denied that the ruling would affect its plans to build the projects. “This is not related to the need for the project," Georgia Power spokesman Jeff Wilson told the Atlanta Journal Constitution. "Construction will continue as scheduled on the new Vogtle units."

SACE filed its lawsuit (PDF) against the PSC and Georgia Gov. Sonny Perdue in June 2009. The challenge also sought a declaratory judgment that the Georgia Nuclear Financing Act, or Georgia Senate Bill 31, was unconstitutional under state law. That law allows Georgia Power to charge its customers an additional $1.30 in monthly power bills to cover costs for the two Vogtle reactors starting in 2011. By 2017, when the first reactor is expected to be commercially operational, the rate hike could reach $9.10.

But Shoob had earlier this month dismissed that portion of the lawsuit, ruling that it was too premature to contest because the rates had not yet been raised.

The Alvin W. Vogtle Electric Generation Plant is one of Georgia Power’s two nuclear facilities and one of three nuclear facilities in the Southern Co. system. Southern Nuclear, a subsidiary of Southern Co. since 1990, is the licensed operator of Plant Vogtle, which is located about 25 miles south of Augusta, Ga.

The plant is jointly owned by Georgia Power (45.7%), Oglethorpe Power Corp. (30%), Municipal Electric Authority of Georgia (22.7%), and the Dalton Utilities (1.6%). Units 1 and 2 consist of Westinghouse four-loop pressurized water reactors rated at 1,109 and 1,127 MW respectively. Unit 1 began commercial operation in 1987; Unit 2 followed in 1989.

This February, President Barack Obama offered to conditionally guarantee $8.33 billion in loans for the project. The pledge marks the first federal nuclear loan guarantee, and it could boost construction of the first U.S. nuclear plant in more than 30 years. (For more about the plant, see POWER’s November 2009 feature on the facility, “Plant Vogtle Leads the Next Nuclear Generation.”)

One condition of the DOE loan guarantee is that the U.S. Nuclear Regulatory Commission (NRC) must determine if the AP1000 reactor design fulfills the regulatory requirements for a construction and operating license (COL), a decision Southern Co. expects by the end of 2011. The Vogtle project has recently faced increased scrutiny, owing to the NRC’s Oct. 16 notice to Westinghouse Electric Co. that it had not adequately demonstrated the structural strength of certain components of the reactor design, specifically for the shield building.

Several AP1000 reactors are under construction in China and 14 units proposing to use the design are under regulatory review at seven sites in the U.S.. Westinghouse, which is on its 18th revision of the design, maintains the AP1000 is the "the safest and most economical nuclear power plant available in the worldwide commercial marketplace."

In a related story, Energy Secretary Steven Chu told the Senate Subcommittee on Energy and Water Development that the DOE would need an additional $13 billion in authority from Congress to provide loan guarantees for building three new nuclear plants. Now that the DOE had pledged $8.3 billion to the Vogtle project, the $12 billion remaining in its authority would be enough to cover only one more project, Chu said.

The competition for the second multibillion-dollar federal loan guarantee has reportedly been narrowed to two contenders: the Calvert Cliffs 3 reactor in southern Maryland and South Texas Project 3 and 4.

No timeline has been issued by the Energy Department on when it will announce the next recipient of a conditional nuclear loan guarantee. The Obama administration earlier this year asked Congress for $54.5 billion in nuclear loan authority as part of its 2011 federal budget, which would begin this Oct. 1.

Sources: POWERnews, POWER, SACE, Atlanta Journal Constitution, Westinghouse, Senate Subcommittee on Energy and Water Development