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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2017
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                    to

Commission File No. 333-192954

(An Electric Membership Corporation)

(Exact name of registrant as specified in its charter)

Georgia (State or other jurisdiction of incorporation or organization)	58-1211925 (I.R.S. employer identification no.)
2100 East Exchange Place Tucker, Georgia (Address of principal executive offices)	30084-5336 (Zip Code)
Registrant's telephone number, including area code	(770) 270-7600

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o    No ý

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer o    Accelerated Filer o    Non-Accelerated Filer ý    (Do not check if a smaller reporting company)    Smaller Reporting Company o    Emerging Growth Company o

        If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. The registrant is a membership corporation and has no authorized or outstanding equity securities.

(This page has been left blank intentionally)

OGLETHORPE POWER CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2017

		Page No.
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Unaudited Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016	1
	Unaudited Consolidated Statements of Revenues and Expenses For the Six Months ended June 30, 2017 and 2016	3
	Unaudited Consolidated Statements of Comprehensive Margin For the Six Months ended June 30, 2017 and 2016	4
	Unaudited Consolidated Statements of Patronage Capital and Membership Fees and Accumulated Other Comprehensive (Deficit) Margin For the Six Months ended June 30, 2017 and 2016	5
	Unaudited Consolidated Statements of Cash Flows For the Six Months ended June 30, 2017 and 2016	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	39
SIGNATURES		40

i

CAUTIONARY STATEMENT REGARDING

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains "forward-looking statements." All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate to occur in the future, including matters such as the timing of various regulatory and other actions, future capital expenditures, business strategy and development, construction or operation of facilities (often, but not always, identified through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "projection," "target" and "outlook") are forward-looking statements.

Although we believe that in making these forward-looking statements our expectations are based on reasonable assumptions, any forward-looking statement involves uncertainties and there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Some of the risks, uncertainties and assumptions that may cause actual results to differ from these forward-looking statements are described under "Item 1A—RISK FACTORS" and in other sections of our annual report on Form 10-K for the fiscal year ended December 31, 2016 and under "Risk Factors" in our Form 10-Q for the quarterly period ended March 31, 2017 and in this quarterly report on Form 10-Q. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this quarterly report may not occur.

Any forward-looking statement speaks only as of the date of this quarterly report, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of them; nor can we assess the impact of each factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

•

cost increases and schedule delays with respect to our capital improvement and construction projects, in particular, the construction of two additional nuclear units at Plant Vogtle;

•

the results of Westinghouse Electric Company LLC and WECTEC Global Project Services Inc.'s bankruptcy filing and any inability or failure by Toshiba Corporation to perform its obligations pursuant to its settlement agreement related to its guarantee of certain of Westinghouse's obligations related to the additional units at Plant Vogtle;

•

our access to capital, the cost to access capital, and the results of our financing and refinancing efforts, including availability of funds in the capital markets;

•

our current inability to receive advances under the U.S. Department of Energy loan guarantee agreement for construction of two additional nuclear units at Plant Vogtle;

•

the occurrence of certain events that give the Department of Energy the option to require that we repay all amounts outstanding under the loan guarantee agreement with the Department of Energy over a five year period and the Department of Energy's decision to require such repayment;

•

the continued availability of funding from the Rural Utilities Service;

•

the impact of regulatory or legislative responses to climate change initiatives or efforts to reduce greenhouse gas emissions, including carbon dioxide;

•

costs associated with achieving and maintaining compliance with applicable environmental laws and regulations, including those related to air emissions, water and coal combustion byproducts;

ii

•

legislative and regulatory compliance standards and our ability to comply with any applicable standards, including mandatory reliability standards, and potential penalties for non-compliance;

•

increasing debt caused by significant capital expenditures;

•

actions by credit rating agencies;

•

commercial banking and financial market conditions;

•

risks and regulatory requirements related to the ownership and construction of nuclear facilities;

•

adequate funding of our nuclear decommissioning trust funds including investment performance and projected decommissioning costs;

•

continued efficient operation of our generation facilities by us and third-parties;

•

the availability of an adequate and economical supply of fuel, water and other materials;

•

reliance on third-parties to efficiently manage, distribute and deliver generated electricity;

•

acts of sabotage, wars or terrorist activities, including cyber attacks;

•

the inability of counterparties to meet their obligations to us, including failure to perform under agreements;

•

litigation or legal and administrative proceedings and settlements;

•

changes in technology available to and utilized by us, our competitors, or residential or commercial consumers in our members' service territories, including from the development and deployment of distributed generation and energy storage technologies;

•

unanticipated variation in demand for electricity or load forecasts resulting from changes in population and business growth (and declines), consumer consumption, energy conservation and efficiency efforts and the general economy;

•

our members' ability to perform their obligations to us;

•

changes to protections granted by the Georgia Territorial Act that subject our members to increased competition;

•

general economic conditions;

•

weather conditions and other natural phenomena;

•

unanticipated changes in interest rates or rates of inflation;

•

significant changes in our relationship with our employees, including the availability of qualified personnel;

•

unanticipated changes in capital expenditures, operating expenses and liquidity needs;

•

significant changes in critical accounting policies material to us; and

•

hazards customary to the electric industry and the possibility that we may not have adequate insurance to cover losses resulting from these hazards.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Oglethorpe Power Corporation
Consolidated Balance Sheets (Unaudited)
June 30, 2017 and December 31, 2016

		(dollars in thousands)
	2017			2016
Assets
Electric plant:
In service	$	8,849,600		$	8,786,839
Less: Accumulated provision for depreciation		(4,210,083	)		(4,115,339	)
		4,639,517			4,671,500
Nuclear fuel, at amortized cost		367,542			377,653
Construction work in progress		3,639,944			3,228,214
Total electric plant		8,647,003			8,277,367
Investments and funds:
Nuclear decommissioning trust fund		414,130			386,029
Investment in associated companies		73,877			72,783
Long-term investments		118,659			99,874
Restricted investments		208,975			221,122
Other		21,363			20,730
Total investments and funds		837,004			800,538
Current assets:
Cash and cash equivalents		286,106			366,290
Restricted short-term investments		185,117			247,006
Receivables		151,044			155,042
Inventories, at average cost		266,728			259,831
Prepayments and other current assets		21,906			32,919
Total current assets		910,901			1,061,088
Deferred charges:
Regulatory assets		565,264			545,387
Other		15,401			16,733
Total deferred charges		580,665			562,120
Total assets	$	10,975,573		$	10,701,113

The accompanying notes are an integral part of these consolidated financial statements.

1

Oglethorpe Power Corporation
Consolidated Balance Sheets (Unaudited)
June 30, 2017 and December 31, 2016

		(dollars in thousands)
	2017			2016
Equity and Liabilities
Capitalization:
Patronage capital and membership fees	$	902,690		$	859,810
Accumulated other comprehensive margin		(408	)		(370	)
		902,282			859,440
Long-term debt		7,853,581			7,892,836
Obligation under capital lease		89,710			92,096
Other		19,398			18,765
Total capitalization		8,864,971			8,863,137
Current liabilities:
Long-term debt and capital lease due within one year		154,805			316,861
Short-term borrowings		528,097			102,168
Accounts payable		139,704			73,801
Accrued interest		61,690			93,634
Member power bill prepayments, current		119,957			176,988
Other current liabilities		46,662			59,979
Total current liabilities		1,050,915			823,431
Deferred credits and other liabilities:
Asset retirement obligations		715,082			698,051
Member power bill prepayments, non-current		56,315			48,115
Contract retainage		40,379			40,008
Regulatory liabilities		217,392			197,748
Other		30,519			30,623
Total deferred credits and other liabilities		1,059,687			1,014,545
Total equity and liabilities	$	10,975,573		$	10,701,113

The accompanying notes are an integral part of these consolidated financial statements.

2

Oglethorpe Power Corporation
Consolidated Statements of Revenues and Expenses (Unaudited)
For the Six Months Ended June 30, 2017 and 2016

		(dollars in thousands)
	Three Months						Six Months
	2017			2016			2017			2016
Operating revenues:
Sales to Members	$	367,073		$	379,154		$	721,217		$	727,251
Sales to non-Members		46			189			72			253
Total operating revenues		367,119			379,343			721,289			727,504
Operating expenses:
Fuel		118,723			126,588			222,638			225,540
Production		99,185			103,180			200,273			206,651
Depreciation and amortization		55,977			54,401			111,840			107,887
Purchased power		14,901			13,002			29,877			26,145
Accretion		9,111			8,024			18,109			16,040
Total operating expenses		297,897			305,195			582,737			582,263
Operating margin		69,222			74,148			138,552			145,241
Other income:
Investment income		14,840			12,727			29,659			25,050
Other		641			2,427			1,281			4,728
Total other income		15,481			15,154			30,940			29,778
Interest charges:
Interest expense		93,527			91,005			186,812			179,522
Allowance for debt funds used during construction		(33,349	)		(27,945	)		(66,436	)		(54,325	)
Amortization of debt discount and expense		3,099			2,965			6,236			5,947
Net interest charges		63,277			66,025			126,612			131,144
Net margin	$	21,426		$	23,277		$	42,880		$	43,875

The accompanying notes are an integral part of these consolidated financial statements.

3

Oglethorpe Power Corporation
Consolidated Statements of Comprehensive Margin (Unaudited)
For the Six Months Ended June 30, 2017 and 2016

		(dollars in thousands)
	Three Months				Six Months
	2017		2016		2017			2016
Net margin	$	21,426	$	23,277	$	42,880		$	43,875
Other comprehensive margin:
Unrealized gain (loss) on available-for-sale securities		1		93		(38	)		377
Total comprehensive margin	$	21,427	$	23,370	$	42,842		$	44,252

The accompanying notes are an integral part of these consolidated financial statements.

4

Oglethorpe Power Corporation
Consolidated Statements of Patronage Capital and Membership Fees
and Accumulated Other Comprehensive (Deficit) Margin (Unaudited)
For the Six Months Ended June 30, 2017 and 2016

		(dollars in thousands)
	Patronage Capital and Membership Fees		Accumulated Other Comprehensive (Deficit) Margin			Total
Balance at December 31, 2015	$	809,465	$	58		$	809,523
Components of comprehensive margin:
Net margin		43,875		—			43,875
Unrealized gain on available-for-sale securities		—		377			377
Balance at June 30, 2016	$	853,340	$	435		$	853,775
Balance at December 31, 2016	$	859,810	$	(370	)	$	859,440
Components of comprehensive margin:
Net margin		42,880		—			42,880
Unrealized loss on available-for-sale securities		—		(38	)		(38	)
Balance at June 30, 2017	$	902,690	$	(408	)	$	902,282

The accompanying notes are an integral part of these consolidated financial statements.

5

Oglethorpe Power Corporation
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2017 and 2016

		(dollars in thousands)
	2017			2016
Cash flows from operating activities:
Net margin	$	42,880		$	43,875
Adjustments to reconcile net margin to net cash provided by operating activities:
Depreciation and amortization, including nuclear fuel		185,640			177,367
Accretion cost		18,109			16,040
Amortization of deferred gains		(894	)		(894	)
Allowance for equity funds used during construction		(387	)		(352	)
Deferred outage costs		(22,194	)		(26,090	)
(Gain) loss on sale of investments		(16,352	)		633
Regulatory deferral of costs associated with nuclear decommissioning		5,707			(10,677	)
Other		(4,934	)		(3,429	)
Change in operating assets and liabilities:
Receivables		4,556			(37,697	)
Inventories		(6,897	)		4,386
Prepayments and other current assets		361			(698	)
Accounts payable		21,986			(73,698	)
Accrued interest		(31,944	)		2,006
Accrued taxes		(2,641	)		(3,597	)
Other current liabilities		(4,852	)		(23,977	)
Member power bill prepayments		(48,831	)		(24,876	)
Total adjustments		96,433			(5,553	)
Net cash provided by operating activities		139,313			38,322
Cash flows from investing activities:
Property additions		(474,683	)		(301,545	)
Activity in nuclear decommissioning trust fund—Purchases		(235,754	)		(216,217	)
—Proceeds		232,376			212,949
Decrease in restricted cash and investments		12,147			31,574
Decrease in restricted short-term investments		61,889			1,340
Activity in other long-term investments—Purchases		(39,042	)		(31,114	)
—Proceeds		25,390			24,820
Other		(2,225	)		2,494
Net cash used in investing activities		(419,902	)		(275,699	)
Cash flows from financing activities:
Long-term debt proceeds		4,517			628,358
Long-term debt payments		(240,182	)		(75,537	)
Increase (decrease) in short-term borrowings, net		425,929			(185,483	)
Other		10,141			4,370
Net cash provided by financing activities		200,405			371,708
Net (decrease) increase in cash and cash equivalents		(80,184	)		134,331
Cash and cash equivalents at beginning of period		366,290			213,038
Cash and cash equivalents at end of period	$	286,106		$	347,369
Supplemental cash flow information:
Cash paid for—
Interest (net of amounts capitalized)	$	150,849		$	121,760
Supplemental disclosure of non-cash investing and financing activities:
Change in asset retirement obligations	$	—		$	70,780
Change in accrued property additions	$	38,038		$	(38,209	)
Interest paid-in-kind	$	28,092		$	21,765

The accompanying notes are an integral part of these consolidated financial statements.

6

Oglethorpe Power Corporation
Notes to Unaudited Consolidated Financial Statements

(A)

General.    The consolidated financial statements included in this report have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the information furnished in this report reflects all adjustments (which include only normal recurring adjustments) and estimates necessary to fairly state, in all material respects, the results for the three-month and six-month periods ended June 30, 2017 and 2016. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading.

These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC. The results of operations for the three-month and six-month periods ended June 30, 2017 are not necessarily indicative of results to be expected for the full year. As noted in our 2016 Form 10-K, our revenues consist primarily of sales to our 38 electric distribution cooperative members and, thus, the receivables on the consolidated balance sheets are principally from our members. See "Notes to Consolidated Financial Statements" in our 2016 Form 10-K.

(B)

Fair Value.    Authoritative guidance regarding fair value measurements for financial and non-financial assets and liabilities defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements.

The guidance establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

•

Level 1.  Quoted prices from active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Quoted prices in active markets provide the most reliable evidence of fair value and are used to measure fair value whenever available. Level 1 primarily consists of financial instruments that are exchange-traded.

•

Level 2.  Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Level 2 primarily consists of financial instruments that are non-exchange-traded but have significant observable inputs.

•

Level 3.  Pricing inputs that include significant inputs which are generally less observable from objective sources. These inputs may include internally developed methodologies that result in management's best estimate of fair value. Level 3 financial instruments are those whose fair value is based on significant unobservable inputs.

7

As required by the guidance, assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:

1.    Market approach.    The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business) and deriving fair value based on these inputs.

2.    Income approach.    The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts.

3.    Cost approach.    The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (often referred to as current replacement cost). This approach assumes that the fair value would not exceed what it would cost a market participant to acquire or construct a substitute asset or comparable utility, adjusted for obsolescence.

The tables below detail assets and liabilities measured at fair value on a recurring basis at June 30, 2017 and December 31, 2016.

	Fair Value Measurements at Reporting Date Using
		June 30, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
		(dollars in thousands)
Nuclear decommissioning trust funds:
Domestic equity	$	132,230	$	132,230	$	—	$	—
International equity trust		77,338		—		77,338		—
Corporate bonds		66,221		—		66,221		—
US Treasury and government agency securities		74,414		74,414		—		—
Agency mortgage and asset backed securities		14,743		—		14,743		—
Mutual funds		45,353		45,353		—		—
Municipal bonds		471		—		471		—
Other		3,360		3,360		—		—
Long-term investments:
International equity trust		19,707		—		19,707		—
Corporate bonds		14,025		—		14,025		—
US Treasury and government agency securities		12,134		12,134		—		—
Agency mortgage and asset backed securities		1,344		—		1,344		—
Mutual funds		71,098		71,098		—		—
Other		351		351		—		—
Natural gas swaps		858		—		858		—

8

	Fair Value Measurements at Reporting Date Using
		December 31, 2016			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
		(dollars in thousands)
Nuclear decommissioning trust funds:
Domestic equity	$	170,408		$	170,408	$	—		$	—
International equity trust		66,861			—		66,861			—
Corporate bonds		60,019			—		60,019			—
US Treasury and government agency securities		65,725			65,725		—			—
Agency mortgage and asset backed securities		17,410			—		17,410			—
Municipal bonds		943			—		943
Other		4,663			4,663		—			—
Long-term investments:
Corporate bonds		11,853			—		11,853			—
US Treasury and government agency securities		12,187			12,187		—			—
Agency mortgage and asset backed securities		1,651			—		1,651			—
International equity trust		15,946			—		15,946			—
Mutual funds		57,932			57,932		—			—
Other		305			305		—			—
Natural gas swaps		(15,090	)		—		(15,090	)		—

The estimated fair values of our long-term debt, including current maturities at June 30, 2017 and December 31, 2016 were as follows (in thousands):

		2017				2016
		Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt	$	8,101,124	$	8,973,180	$	8,304,523	$	9,043,029

The estimated fair value of long-term debt is classified as Level 2 and is estimated based on observed or quoted market prices for the same or similar issues or on current rates offered to us for debt of similar maturities. The primary sources of our long-term debt consist of first mortgage bonds, pollution control revenue bonds and long-term debt issued by the Federal Financing Bank that is guaranteed by the Rural Utilities Service or the U.S. Department of Energy. We also have small amounts of long-term debt provided by National Rural Utilities Cooperative Finance Corporation (CFC) and by CoBank, ACB. The valuations for the first mortgage bonds and the pollution control revenue bonds were obtained from a third party data reporting service, and are based on secondary market trading of our debt. Valuations for debt issued by the Federal Financing Bank are based on U.S. Treasury rates as of June 30, 2017 plus an applicable spread, which reflects our borrowing rate for new loans of this type from the Federal Financing Bank. The rates on the CFC debt are fixed and the valuation is based on rate quotes provided by CFC. We

9

use an interest rate quote sheet provided by CoBank for valuation of the CoBank debt, which reflects current rates for similar loans.

For cash and cash equivalents, and receivables, the carrying amount approximates fair value because of the short-term maturity of those instruments. Restricted investments consist of funds on deposit with the Rural Utilities Service in the Cushion of Credit Account. The carrying amount approximates fair value.

(C)

Derivative Instruments.    Our risk management and compliance committee provides general oversight over all risk management and compliance activities, including but not limited to, commodity trading, investment portfolio management and interest rate risk management. We use commodity trading derivatives to manage our exposure to fluctuations in the market price of natural gas. We do not apply hedge accounting for any of these derivatives, but apply regulatory accounting. Consistent with our rate-making, unrealized gains or losses on our natural gas swaps are reflected as regulatory assets or liabilities, as appropriate.

We are exposed to credit risk as a result of entering into these hedging arrangements. Credit risk is the potential loss resulting from a counterparty's nonperformance under an agreement. We have established policies and procedures to manage credit risk through counterparty analysis, exposure calculation and monitoring, exposure limits, collateralization and certain other contractual provisions.

It is possible that volatility in commodity prices could cause us to have credit risk exposures with one or more counterparties. If such counterparties fail to perform their obligations, we could suffer a financial loss. However, as of June 30, 2017 all of the counterparties with transaction amounts outstanding under our hedging programs are rated investment grade by the major rating agencies or have provided a guaranty from one of their affiliates that is rated investment grade.

We have entered into International Swaps and Derivatives Association agreements with our natural gas hedge counterparties that mitigate credit exposure by creating contractual rights relating to creditworthiness, collateral, termination and netting (which, in certain cases, allows us to use the net value of affected transactions with the same counterparty in the event of default by the counterparty or early termination of the agreement).

Additionally, we have implemented procedures to monitor the creditworthiness of our counterparties and to evaluate nonperformance in valuing counterparty positions. We have contracted with a third party to assist in monitoring certain of our counterparties' credit standing and condition. Net liability positions are generally not adjusted as we use derivative transactions as hedges and have the ability and intent to perform under each of our contracts. In the instance of net asset positions, we consider general market conditions and the observable financial health and outlook of specific counterparties, forward looking data such as credit default swaps, when available, and historical default probabilities from credit rating agencies in evaluating the potential impact of nonperformance risk to derivative positions.

The contractual agreements contain provisions that could require us or the counterparty to post collateral or credit support. The amount of collateral or credit support that could be required is calculated as the difference between the aggregate fair value of the hedges and pre-established credit thresholds. The credit thresholds are contingent upon each party's credit ratings from the major credit rating agencies. The collateral and credit support requirements vary by contract and by counterparty.

Gas hedges.     Under the natural gas swap arrangements, we pay the counterparty a fixed price for specified natural gas quantities and receive a payment for such quantities based on a market price index. These payment obligations are netted, such that if the market price index is lower than the

10

fixed price, we will make a net payment, and if the market price index is higher than the fixed price, we will receive a net payment.

At June 30, 2017 and December 31, 2016, the estimated fair value of our natural gas contracts was a net liability of approximately $858,000 and a net asset of $15,090,000, respectively.

As of June 30, 2017 and December 31, 2016, neither we nor any counterparties were required to post credit support or collateral under the natural gas swap agreements. If the credit-risk-related contingent features underlying these agreements were triggered on June 30, 2017 due to our credit rating being downgraded below investment grade, we would have been required to post collateral or letters of credit of $3,184,000 with our counterparties.

The following table reflects the volume activity of our natural gas derivatives as of June 30, 2017 that is expected to settle or mature each year:

Year	Natural Gas Swaps (MMBTUs) (in millions)
2017	13.69
2018	23.47
2019	18.59
2020	15.33
2021	12.83
2022	4.12
Total	88.03

Interest rate options.     In fourth quarter of 2011, we purchased seventeen LIBOR swaptions at a cost of $100,000,000 with a total notional amount of approximately $2,200,000,000 to hedge the interest rates on a portion of the debt that we are incurring to finance the two additional nuclear units at Plant Vogtle. The last of these options, having a notional value of $80,169,000, expired without value at March 31, 2017.

We are deferring the premiums paid to purchase these LIBOR swaptions, related carrying and other incidental costs in accordance with our rate-making treatment. The deferral will continue and costs will be amortized and collected in rates over the life of the associated debt that we hedged with the swaptions.

The table below reflects the fair value of derivative instruments and their effect on our consolidated balance sheets at June 30, 2017 and December 31, 2016.

	Balance Sheet Location		Fair Value
			2017		2016
			(dollars in thousands)
Not designated as hedges:
Assets:
Natural gas swaps	Other current assets	$	3,182	$	13,833
Natural gas swaps	Other deferred charges	$	—	$	3,289
Liabilities:
Natural gas swaps	Other current liabilities	$	482	$	54
Natural gas swaps	Other deferred credits	$	3,558	$	1,977

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The following table presents the gross realized gains and (losses) on derivative instruments recognized in margin for the three and six months ended June 30, 2017 and 2016.

	Statement of Revenues and Expenses Location		Three months ended June 30,						Six months ended June 30,
			2017			2016			2017			2016
			(dollars in thousands)
Not Designated as hedges:
Natural Gas Swaps	Fuel	$	1,897		$	7		$	2,736		$	18
Natural Gas Swaps	Fuel		(73	)		(8,111	)		(817	)		(12,339	)
		$	1,824		$	(8,104	)	$	1,919		$	(12,321	)

The following table presents the unrealized gains and (losses) on derivative instruments deferred on the balance sheet at June 30, 2017 and December 31, 2016.

	Balance Sheet Location		2017			2016
			(dollars in thousands)
Not designated as hedges:
Natural gas swaps	Regulatory asset	$	(3,184	)	$	(62	)
Natural gas swaps	Regulatory liability		2,326			15,152
Interest rate options	Regulatory asset		—			(5,788	)
Total not designated as hedges		$	(858	)	$	9,302

(D)

Investments in Debt and Equity Securities.    Investment securities we hold are classified as available-for-sale. Available-for-sale securities are carried at market value with unrealized gains and losses, net of any tax effect, added to or deducted from other comprehensive margin, except that, in accordance with our rate-making treatment, unrealized gains and losses from investment securities held in the nuclear decommissioning funds are directly added to or deducted from the regulatory asset for asset retirement obligations. Realized gains and losses on the nuclear decommissioning funds are also recorded to the regulatory asset. All realized and unrealized gains and losses are determined using the specific identification method. As of June 30, 2017 approximately 76% of these gross unrealized losses had been unrealized for a duration of less than one year.

The following tables summarize available-for-sale securities as of June 30, 2017 and December 31, 2016.

		Gross Unrealized
		(dollars in thousands)
June 30, 2017		Cost		Gains		Losses			Fair Value
Equity	$	250,191	$	61,721	$	(4,562	)	$	307,350
Debt		221,630		2,161		(2,063	)		221,728
Other		3,710		1		—			3,711
Total	$	475,531	$	63,883	$	(6,625	)	$	532,789

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		Gross Unrealized
		(dollars in thousands)
December 31, 2016		Cost		Gains		Losses			Fair Value
Equity	$	237,317	$	51,054	$	(5,041	)	$	283,330
Debt		201,492		1,167		(3,423	)		199,236
Other		3,339		—		(2	)		3,337
Total	$	442,148	$	52,221	$	(8,466	)	$	485,903

(E)

Recently Issued or Adopted Accounting Pronouncements.    In May 2014, the Financial Accounting Standards Board (FASB) issued "Revenue from Contracts with Customers" (Topic 606). The new revenue standard requires that an entity recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard was effective for the annual reporting period beginning after December 15, 2016 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). Early adoption was not permitted.

In August 2015, the FASB issued an update to Topic 606 deferring the effective date by one year. The standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein. The standard also permits early adoption of the standard, but not before the original effective date of December 15, 2016.


While we expect that the majority of our revenues will be included in the scope of Topic 606, we have not fully completed our evaluation of the new revenue standard. Our evaluation process includes, but is not limited to, identifying contracts within the scope of Topic 606, reviewing and documenting our accounting for these contracts and assessing the applicability of the variable consideration guidance. A large majority of our revenues is derived from substantially identical wholesale power contracts that we have with each of our 38 members. We expect the pattern of revenue recognition pursuant to our wholesale power contracts will remain unchanged on an annual basis under the new revenue standard. However, we continue to evaluate the effects, if any, of Topic 606 on our interim period revenues as it relates to budget adjustments, which may be made during the year that affect our annual revenue requirement. We also continue to evaluate other revenue streams and the related contracts, as well as monitor issues specific to the power and utilities industry. While we have not fully completed our evaluation of the impact of the new revenue recognition guidance, we currently anticipate utilizing a full retrospective transition upon the adoption of Topic 606 as of January 1, 2018.


In January 2016, the FASB issued "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The amendments in this update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The new standard is effective for us for annual reporting periods beginning after December 15, 2017, and interim periods therein. Certain provisions within this update can be adopted early. Certain provisions within this update should be applied by means of a cumulative effect adjustment to the balance sheet of the fiscal year of adoption and certain provisions should be applied prospectively. We are currently evaluating the future impact of this standard on our consolidated financial statements.

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In February 2016, the FASB issued "Leases (Topic 842)." The new leases standard requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability. For finance leases the lessee would recognize interest expense and amortization of the ROU asset and for operating leases the lessee would recognize a straight-line total lease expense. The new lease standard does not substantially change lessor accounting. The new leases standard is effective for us on a modified retrospective approach for annual reporting periods beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. We are currently evaluating the future impact of this standard on our consolidated financial statements.


In June 2016, the FASB issued "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The amendments in this update replace the current incurred loss impairment methodology with a methodology that reflects expected credit losses. The new standard is effective for us prospectively for annual reporting periods beginning after December 15, 2019, and interim periods therein. The amendments in this update can be adopted earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the future impact of this standard on our consolidated financial statements.


In August 2016, the FASB issued "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The amendments in this standard provide specific guidance on eight cash flow classification issues relating to how certain cash receipts and cash payments are presented and classified in the statement of cash flows, thereby reducing the current and potential future diversity in practice. The new standard is effective for us for annual reporting periods beginning after December 15, 2017, and interim periods therein. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. We are currently evaluating the future impact of this standard on our consolidated financial statements.


In November 2016, the FASB issued "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." The amendments in this standard require the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The new standard is effective for us on a retrospective basis for annual reporting periods beginning after December 15, 2017, and interim periods therein. Early adoption is permitted, including adoption in an interim period. Our restricted cash balances are nominal and accordingly we do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

(F)

Accumulated Comprehensive Margin.    The table below provides detail of the beginning and ending balance for each classification of other comprehensive margin along with the amount of any reclassification adjustments included in margin for each of the periods presented in the unaudited Consolidated Statements of Patronage Capital and Membership Fees and Accumulated Other Comprehensive (Deficit) Margin. There were no material changes in the nature, timing or amounts of expected (gain) loss reclassified to net margin from the amounts disclosed in our 2016

14

Form 10-K. Amounts reclassified to net margin in the table below are reflected in "Other income" on our unaudited Consolidated Statements of Revenues and Expenses.


Our effective tax rate is zero; therefore, all amounts below are presented net of tax.

		Accumulated Other Comprehensive (Deficit) Margin
		Three Months Ended June 30, 2016
		(dollars in thousands)
		Available-for-sale Securities
Balance at March 31, 2016	$	342
Unrealized gain		143
(Gain) reclassified to net margin		(50	)
Balance at June 30, 2016	$	435

		Three Months Ended June 30, 2017
		(dollars in thousands)
		Available-for-sale Securities
Balance at March 31, 2017	$	(409	)
Unrealized loss		(14	)
Loss reclassified to net margin		15
Balance at June 30, 2017	$	(408	)

15

		Six Months Ended June 30, 2016
		(dollars in thousands)
		Available-for-sale Securities
Balance at December 31, 2015	$	58
Unrealized gain		437
(Gain) reclassified to net margin		(60	)
Balance at June 30, 2016	$	435

		Six Months Ended June 30, 2017
		(dollars in thousands)
		Available-for-sale Securities
Balance at December 31, 2016	$	(370	)
Unrealized loss		(90	)
Loss reclassified to net margin		52
Balance at June 30, 2017	$	(408	)

(G)

Contingencies and Regulatory Matters.

We do not anticipate that the liabilities, if any, for any current proceedings against us will have a material effect on our financial condition or results of operations. However, at this time, the ultimate outcome of any pending or potential litigation cannot be determined.

a.    Patronage Capital Litigation

On June 9, 2017, the Georgia Court of Appeals upheld the Superior Court of DeKalb County's decision to dismiss on all counts both of the cases described under Note 12—Patronage Capital Litigation in our 2016 Form 10-K. The plaintiffs did not further appeal these dismissals to the Georgia Supreme Court and the appeal period has since expired, ending this litigation.

b.    Environmental Matters

As is typical for electric utilities, we are subject to various federal, state and local environmental laws which represent significant future risks and uncertainties. Air emissions, water discharges and water usage are extensively controlled, closely monitored and periodically reported. Handling and disposal requirements govern the manner of transportation, storage and disposal of various types of waste. We are also subject to climate change regulations that impose restrictions on emissions of greenhouse gases, including carbon dioxide, for certain new and modified facilities.

In general, these and other types of environmental requirements have become increasingly stringent. Such requirements may substantially increase the cost of electric service, by requiring modifications in the design or operation of existing facilities or the purchase of emission allowances. Failure to comply with these requirements could result in civil and criminal penalties and could include the complete shutdown of individual generating units not in compliance. Certain of our debt instruments require us to comply in all material respects with laws, rules, regulations and orders imposed by applicable governmental authorities, which include current and future

16

environmental laws or regulations. Should we fail to be in compliance with these requirements, it would constitute a default under those debt instruments. We believe that we are in compliance with those environmental regulations currently applicable to our business and operations. Although it is our intent to comply with current and future regulations, we cannot provide assurance that we will always be in compliance.

At this time, the ultimate impact of any new and more stringent environmental regulations described above is uncertain and could have an effect on our financial condition, results of operations and cash flows as a result of future additional capital expenditures and increased operations and maintenance costs.

Additionally, litigation over environmental issues and claims of various types, including property damage, personal injury, common law nuisance, and citizen enforcement of environmental requirements such as air quality and water standards, has increased generally throughout the United States. In particular, personal injury and other claims for damages caused by alleged exposure to hazardous materials, and common law nuisance claims for injunctive relief, personal injury and property damage allegedly caused by coal combustion residue, greenhouse gas and other emissions have become more frequent.

(H)

Restricted Investments.    Restricted investments consist of funds on deposit with the Rural Utilities Service in the Cushion of Credit Account. The restricted investments can only be utilized for future Rural Utilities Service-guaranteed Federal Financing Bank debt service payments; deposits can also be used for debt service payments on direct loans made by the Rural Utilities Service but we no longer have such direct loans. The funds on deposit earn interest at a rate of 5% per annum. At June 30, 2017 and December 31, 2016, we had restricted cash and investments totaling $394,143,000 and $468,179,000, respectively, of which $208,975,000 and $221,122,000, respectively, were classified as long-term. The funds on deposit with the Rural Utilities Service in the Cushion of Credit Account are held by the U.S. Treasury, acting through the Federal Financing Bank.

(I)

Regulatory Assets and Liabilities.    We apply the accounting guidance for regulated operations. Regulatory assets represent certain costs that are probable of recovery from our members in future revenues through rates under the wholesale power contracts with our members extending through December 31, 2050. Regulatory liabilities represent certain items of income that we are retaining and that will be applied in the future to reduce revenues required to be recovered from our members.

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The following regulatory assets and liabilities are reflected on the unaudited consolidated balance sheets as of June 30, 2017 and December 31, 2016.

		2017		2016
		(dollars in thousands)
Regulatory Assets:
Premium and loss on reacquired debt(a)	$	53,280	$	55,084
Amortization on capital leases(b)		33,061		32,274
Outage costs(c)		41,396		39,986
Interest rate swap termination fees(d)		2,678		3,570
Asset retirement obligations—Ashpond and other(l)		50,923		33,747
Depreciation expense(e)		43,379		44,091
Deferred charges related to Vogtle Units No. 3 and No. 4 training costs(f)		46,143		43,444
Interest rate options cost(g)		109,737		107,394
Deferral of effects on net margin—Smith Energy Facility(h)		169,426		172,399
Other regulatory assets(m)		15,241		13,398
Total Regulatory Assets	$	565,264	$	545,387
Regulatory Liabilities:
Accumulated retirement costs for other obligations(i)	$	11,749	$	9,829
Deferral of effects on net margin—Hawk Road Energy Facility(h)		19,858		20,163
Major maintenance reserve(j)		36,722		28,379
Amortization on capital leases(b)		21,505		23,084
Deferred debt service adder(k)		90,896		86,082
Asset retirement obligations(l)		31,251		11,766
Other regulatory liabilities(m)		5,411		18,445
Total Regulatory Liabilities	$	217,392	$	197,748
Net Regulatory Assets	$	347,872	$	347,639

^(a)

Represents premiums paid, together with unamortized transaction costs related to reacquired debt that are being amortized over the lives of the refunding debt, which range up to 27 years.

^(b)

Represents the difference between expense recognized for rate-making purposes and financial statement purposes related to capital lease payments and the aggregate of the amortization of the asset and interest on the obligation.

^(c)

Consists of both coal-fired maintenance and nuclear refueling outage costs. Coal-fired outage costs are amortized on a straight-line basis to expense over a 24-month period. Nuclear refueling outage costs are amortized on a straight-line basis to expense over the 18 to 24-month operating cycles of each unit.

^(d)

Represents losses on settled interest rate swap arrangements that are being amortized through the end of 2018.

^(e)

Prior to Nuclear Regulatory Commission (NRC) approval of a 20-year license extension for Plant Vogtle, we deferred the difference between Plant Vogtle depreciation expense based on the then 40-year operating license and depreciation expense assuming an expected 20-year license extension. Amortization commenced upon NRC approval of the license extension in 2009 and is being amortized over the remaining life of the plant.

^(f)

Deferred charges related to Vogtle Units No. 3 and No. 4 training and interest related carrying costs of such training. Amortization will commence effective with the commercial operation date of each unit and amortized to expense over the life of the units.

^(g)

Deferral of costs associated with interest rate options purchased to hedge interest rates on certain borrowings related to Vogtle Units No.3 and No.4 construction that will be amortized over the life of the associated debt.

^(h)

Effects on net margin for Smith and Hawk Road Energy Facilities are being amortized over the remaining life of each respective plant.

⁽ⁱ⁾

Represents the accrual of retirement costs associated with long-lived assets for which there are no legal obligations to retire the assets.

^(j)

Represents collections for future major maintenance costs; revenues are recognized as major maintenance costs are incurred.

^(k)

Represents collections to fund certain debt payments to be made through the end of 2025 which will be in excess of amounts collected through depreciation expense; the deferred credits will be amortized over the remaining useful life of the plants.

^(l)

Represents difference in timing of recognition of the costs of decommissioning for financial statement purposes and for ratemaking purposes.

^(m)

The amortization period for other regulatory assets range up to 33 years and the amortization period of other regulatory liabilities range up to 10 years.

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(J)

Member Power Bill Prepayments.    We have a power bill prepayment program pursuant to which members can prepay their power bills from us at a discount based on our avoided cost of borrowing. The prepayments are credited against the participating members' power bills in the month(s) agreed upon in advance. The discounts are credited against the power bills and are recorded as a reduction to member revenues. The prepayments are being credited against members' power bills through January 2022, with the majority of the balance scheduled to be credited by the end of 2017.

(K)

Debt.

a)

Department of Energy Loan Guarantee:

Pursuant to the loan guarantee program established under Title XVII of the Energy Policy Act of 2005 (the Title XVII Loan Guarantee Program), we and the U.S. Department of Energy, acting by and through the Secretary of Energy, entered into a Loan Guarantee Agreement on February 20, 2014 (as amended, the Loan Guarantee Agreement) pursuant to which the Department of Energy agreed to guarantee our obligations under the Note Purchase Agreement dated as of February 20, 2014 (the Note Purchase Agreement), among us, the Federal Financing Bank and the Department of Energy and two future advance promissory notes, each dated February 20, 2014, made by us to the Federal Financing Bank (the FFB Notes and together with the Note Purchase Agreement, the FFB Credit Facility Documents). The FFB Credit Facility Documents provide for a multi-advance term loan facility (the Facility), under which we may make long-term loan borrowings through the Federal Financing Bank.

Proceeds of advances made under the Facility will be used to reimburse us for a portion of certain costs of construction relating to Vogtle Units No. 3 and No. 4 that are eligible for financing under the Title XVII Loan Guarantee Program. Aggregate borrowings under the Facility may not exceed the lesser of (i) 70% of eligible project costs or (ii) $3,057,069,461, of which $335,471,604 is designated for capitalized interest.

Under the Loan Guarantee Agreement, we are obligated to reimburse the Department of Energy in the event the Department of Energy is required to make any payments to the Federal Financing Bank under the guarantee. Our payment obligations to the Federal Financing Bank under the FFB Notes and reimbursement obligations to the Department of Energy under its guarantee, but not our covenants to the Department of Energy under the Loan Guarantee Agreement, are secured equally and ratably with all of our other notes and obligations issued under our first mortgage indenture. The final maturity date for each advance is February 20, 2044. Interest is payable quarterly in arrears and principal payments will begin on February 20, 2020. Under both FFB Notes, the interest rates during the applicable interest rate periods will equal the current average yield on U.S. Treasuries of comparable maturity at the beginning of the interest rate period, plus a spread equal to 0.375%.

At June 30, 2017, aggregate DOE-guaranteed borrowings totaled $1,706,534,000, including capitalized interest.

On July 27, 2017, we and the Department of Energy entered into Amendment No. 3 to the Loan Guarantee Agreement. Under the amended terms of the Loan Guarantee Agreement, no advances under the Facility will be permitted unless and until such time as Georgia Power, on behalf of the Co-owners (as defined in Note L), has (i) completed comprehensive schedule, cost-to-complete, and cancellation cost assessments (the Cost Assessments) and made a determination to continue construction of Vogtle Units No. 3 and No. 4; (ii) delivered to the Department of Energy an updated project schedule, construction budget, and other information; (iii) entered into one or more agreements with a construction contractor or contractors that will be primarily responsible for construction of Vogtle Units No. 3 and No. 4 and such agreements have been approved by the

19

Department of Energy (together with the Services Agreement (as defined in Note L) and certain related intellectual property licenses (the IP Licenses), the Replacement EPC Arrangements); and (iv) entered into a further amendment to the Loan Guarantee Agreement with the Department of Energy to reflect the Replacement EPC Arrangements.

Under the Loan Guarantee Agreement, we are subject to customary borrower affirmative and negative covenants and events of default. In addition, we are subject to project-related reporting requirements and other project-specific covenants and events of default.

Under the Loan Guarantee Agreement, upon the occurrence of an "Alternate Amortization Event," the Department of Energy may require us to prepay the outstanding principal amount of all guaranteed borrowings over a period of five years, with level principal amortization. These events include (i) cessation of the construction of Vogtle Units No. 3 and No. 4 for twelve consecutive months, (ii) termination of the Services Agreement or rejection of the Services Agreement in bankruptcy if Georgia Power does not maintain access to intellectual property rights under the IP Licenses, (iii) a decision not to continue construction of Vogtle Units No. 3 and No. 4, (iv) Georgia Power, on behalf of the Co-owners, fails to complete the Cost Assessments or enter into the Replacement EPC Arrangements by December 31, 2017, (v) loss of or failure to receive necessary regulatory approvals under certain circumstances, (vi) loss of access to intellectual property rights necessary to construct or operate Vogtle Units No. 3 and No. 4 under certain circumstances, (vii) our failure to fund our share of operation and maintenance expenses for Vogtle Units No. 3 and No. 4 for twelve consecutive months, (viii) change of control of Oglethorpe and (ix) certain events of loss or condemnation.

Under certain circumstances we may be required to make prepayments in connection with our receipt of payments under the settlement agreement with Toshiba regarding the Toshiba Guarantee or from the EPC Contractor under the EPC Agreement (as defined in Note L). In addition, if we receive proceeds from an event of condemnation relating to Vogtle Units No. 3 and No. 4, such proceeds must be applied to immediately prepay outstanding borrowings under the Facility.

We may also voluntarily prepay outstanding borrowings under the Facility. Under the FFB Credit Facility Documents, any prepayment will be subject to a make-whole premium or discount, as applicable.

b)

Rural Utilities Service Guaranteed Loans:

For the six-month period ended June 30, 2017 we received advances on Rural Utilities Service-guaranteed Federal Financing Bank loans totaling $4,517,000 for general and environmental improvements at existing plants.

These advances are secured under our first mortgage indenture.

c)

Pollution Control Revenue Bonds:

In January 2017, we temporarily refinanced $122,600,000 of variable rate pollution control revenue bonds with original maturity dates ranging from 2020 through 2040, through the issuance of commercial paper. The bonds were classified as current debt at December 31, 2016.

(L)

Vogtle Units No. 3 and No. 4 Construction Project.    We, Georgia Power, the Municipal Electric Authority of Georgia, and the City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, doing business as Dalton Utilities (collectively, the Co-owners) are parties to an Ownership Participation Agreement that, along with other agreements, governs our participation in two additional nuclear units at Plant Vogtle, Units No. 3 and No. 4. The Co-owners appointed Georgia Power to act as agent under this agreement. Our binding ownership interest and proportionate share of the cost to construct these units is 30%. Pursuant to this agreement, Georgia Power has designated Southern Nuclear Operating

20

Company, Inc. as its agent for licensing, engineering, procurement, contract management, construction and pre-operation services.

In 2008, Georgia Power, acting for itself and as agent for the Co-owners, entered into an Engineering, Procurement and Construction Agreement (the EPC Agreement) with Westinghouse Electric Company LLC and Stone & Webster, Inc. (collectively, the EPC Contractor). Stone & Webster was subsequently acquired by Westinghouse and changed its name to WECTEC Global Project Services Inc. (WECTEC). Pursuant to the EPC Agreement, the EPC Contractor agreed to design, engineer, procure, construct and test two 1,100 megawatt nuclear units using the Westinghouse AP1000 technology and related facilities at Plant Vogtle.

Under the EPC Agreement, the Co-owners agreed to pay a purchase price that is subject to certain price escalations and adjustments, including fixed escalation amounts and certain index-based adjustments, as well as adjustments for change orders and performance bonuses. The EPC Agreement also provided for liquidated damages upon the EPC Contractor's failure to fulfill the schedule and certain performance guarantees, each subject to an aggregate cap of 10% of the contract price, or approximately $920 million.

Toshiba Corporation guaranteed certain payment obligations of the EPC Contractor under the EPC Agreement (the Toshiba Guarantee), including any liability of the EPC Contractor for abandonment of work. In January 2016, Westinghouse delivered to the Co-owners $920 million of letters of credit from financial institutions (Westinghouse Letters of Credit) to secure a portion of the EPC Contractor's potential obligations under the EPC Agreement. The Westinghouse Letters of Credit are subject to annual renewals through June 30, 2020, and require 60 days' written notice to Georgia Power, as agent of the Co-owners, in the event the Westinghouse Letters of Credit will not be renewed.

Under the terms of the EPC Agreement, the EPC Contractor did not have the right to terminate the EPC Agreement for convenience. In the event of an abandonment of work by the EPC Contractor, the maximum liability of the EPC Contractor under the EPC Agreement was 40% of the contract price, or $3.68 billion, of which our proportionate share is approximately $1.1 billion.

On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. To provide for a continuation of work at Vogtle Units No. 3 and No. 4, Georgia Power, acting for itself and as agent for the other Co-owners, entered into an Interim Assessment Agreement with the EPC Contractor and WECTEC Staffing Services LLC which the bankruptcy court approved on March 30, 2017.

The Interim Assessment Agreement provided, among other items, that during the term of the Interim Assessment Agreement (i) Georgia Power was obligated to pay, on behalf of the Co-owners, all costs accrued by the EPC Contractor for subcontractors and vendors for services performed or goods provided, with these amounts paid to the EPC Contractor, except that amounts accrued for Fluor Corporation (Fluor) were to be paid directly to Fluor; (ii) the EPC Contractor was to provide certain engineering, procurement and management services for Vogtle Units No. 3 and No. 4, to the same extent as contemplated by the EPC Agreement, and Georgia Power, on behalf of the Co-owners, made payments of $5.4 million per week for these services; (iii) Georgia Power had the right to make payments, on behalf of the Co-owners, directly to subcontractors and vendors who had accounts past due with the EPC Contractor; (iv) the EPC Contractor was to use commercially reasonable efforts to provide information reasonably requested by Georgia Power as was necessary to continue construction and investigation of the completion status of Vogtle Units No. 3 and No. 4; (v) the EPC Contractor was to reject or accept the EPC Agreement by the termination of the Interim Assessment Agreement; and (vi) Georgia Power, on behalf of the Co-owners, would not exercise any remedies against Toshiba under the Toshiba

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Guarantee. Under the Interim Assessment Agreement, all parties expressly reserved all rights and remedies under the EPC Agreement and all related security and collateral under applicable law.

The Interim Assessment Agreement, as amended, expired on July 27, 2017. The Co-owners' aggregate liability under the Interim Assessment Agreement totaled approximately $650 million, of which our proportionate share totaled approximately $195 million. As of June 30, 2017, approximately $552 million of this aggregate liability had been paid or accrued.

Subsequent to the EPC Contractor's bankruptcy filing, a number of subcontractors to the EPC Contractor, including Fluor Enterprises, Inc., a subsidiary of Fluor, alleged non-payment by the EPC Contractor for amounts owed for work performed on Vogtle Units No. 3 and No. 4. Georgia Power, acting for itself and as agent for the Co-owners, has taken, and continues to take, actions to remove liens filed by these subcontractors through the posting of surety bonds. Georgia Power estimates the aggregate liability, through July 31, 2017, of the Co-owners for the removal of subcontractor liens and payment of other EPC Contractor pre-petition accounts payable to total approximately $400 million, of which our proportionate share would total approximately $120 million. As of June 30, 2017, approximately $354 million of this aggregate liability had been paid or accrued.

On June 9, 2017, Georgia Power and the other Co-owners and Toshiba entered into a settlement agreement regarding the Toshiba Guarantee (the Guarantee Settlement Agreement). Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion (the Guarantee Obligations), of which our proportionate share is approximately $1.1 billion, and that the Guarantee Obligations exist regardless of whether Vogtle Units No. 3 and No. 4 are completed. The Guarantee Settlement Agreement also provides for a schedule of payments for the Guarantee Obligations, beginning in October 2017 and continuing through January 2021. In the event Toshiba receives certain payments, including sale proceeds, from or related to Westinghouse (or its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or its subsidiaries), it will hold a portion of such payments in trust for the Co-owners and promptly pay them over as offsets against any remaining Guarantee Obligations. Under the Guarantee Settlement Agreement, the Co-owners will forbear from exercising remedies in respect of the Toshiba Guarantee, including drawing on the Westinghouse Letters of Credit, until June 30, 2020, unless certain events of nonpayment, insolvency, or other material breach of the Guarantee Settlement Agreement by Toshiba occur. If such an event occurs, the balance of the Guarantee Obligations will become immediately due and payable, and the Co-owners may exercise any and all rights and remedies, including drawing on the Westinghouse Letters of Credit without restriction. In addition, the Guarantee Settlement Agreement does not restrict the Co-owners from fully drawing on the Westinghouse Letters of Credit in the event they are not renewed or replaced prior to the expiration date.

On August 10, 2017, Toshiba released its financial results for the first quarter of fiscal year 2017, which reflected a negative shareholders' equity balance of approximately $4.5 billion as of June 30, 2017. Toshiba also announced the existence of material events and conditions that raise substantial doubt about Toshiba's ability to continue as a going concern. As a result, substantial risk regarding the Co-owners' ability to fully collect the Guarantee Obligations continues to exist. An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Co-owners of Vogtle Units No. 3 and No. 4, and, therefore, on our financial condition and results of operations as well.

Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Co-owners, and the EPC Contractor entered into a services agreement, which was amended and restated on July 20, 2017 (as amended and restated, the Services Agreement), for the EPC Contractor to transition construction management of Vogtle Units No. 3 and No. 4 to Southern

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Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 20, 2017, the bankruptcy court approved the EPC Contractor's motion seeking authorization to (i) enter into the Services Agreement, (ii) assume and assign to the Co-owners certain project-related contracts, (iii) join the Co-owners as counterparties to certain assumed project-related contracts, and (iv) reject the EPC Agreement. The Services Agreement became effective upon approval by the Department of Energy on July 27, 2017 and will continue until the start-up and testing of Vogtle Units No. 3 and No. 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Co-owners upon 30 days' written notice.

Georgia Power and the other Co-owners are continuing to conduct a comprehensive schedule and cost-to-complete assessment, as well as a cancellation cost assessment, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule of Vogtle Units No. 3 and No. 4. As of June 30, 2017, our total investment in the additional Vogtle units was approximately $3.7 billion.

If construction continues on Vogtle Units No. 3 and No. 4, based on Oglethorpe's preliminary assessment, we expect our project budget to range from approximately $6.5 billion to $7.3 billion, including a contingency amount. These estimates assume commercial operation dates that range from mid-2021 to mid-2022 for Unit 3 and a year later for Unit 4. They also assume 100% recovery of our approximately $1.1 billion share of the Guarantee Obligations from Toshiba. Prior to the EPC Contractor bankruptcy, our project budget was $5 billion under the "fixed price" EPC Agreement. As the EPC Agreement has been rejected in bankruptcy, this preliminary budget range represents potential costs based on various assumptions regarding cost and schedule to complete the additional Vogtle Units. We anticipate Southern Nuclear will manage the project toward the lower end of our budget range; however, we are conservatively planning around the upper end of the range. The risk remains that cost and schedule could exceed the upper end of this range if we go forward with the project. We anticipate our total monthly costs, including interest during construction, through the remainder of 2017 to be approximately $70 million per month, which assumes we receive our proportionate share of the proceeds from the Toshiba Guarantee Settlement Agreement. Should construction continue, our total monthly costs will vary over time and will decline significantly as the project nears completion.

If the Co-owners determine to suspend or cancel the Vogtle project, based on the most recent assessment results, the Co-owners' aggregate cancellation costs of the site are estimated to range from approximately $700 million to $800 million, of which our proportionate share would be approximately $210 million to $240 million. As of June 30, 2017, our total investment in the additional Vogtle units was approximately $3.7 billion. Depending upon the circumstances of suspending the additional Vogtle units, we would determine the appropriate accounting treatment for our investment in the Vogtle units. If the investment were to be written off, we would seek regulatory accounting treatment to amortize the investment over a long-term period which requires the approval of our board of directors, and we would submit the regulatory accounting treatment details to the Rural Utilities Service for its approval.

We intend to continue working with Georgia Power and the other Co-owners to determine future actions related to Vogtle Units No. 3 and No. 4. Georgia Power has stated that it is working with the Georgia Public Service Commission in regards to this same determination. Georgia Power has stated further that it expects to include a recommendation regarding completion of the Vogtle units in its Vogtle Construction Monitoring report to be filed with the Georgia Public Service Commission in late August 2017.

There have been technical and procedural challenges to the construction and licensing of Vogtle Units No. 3 and No. 4 at the federal and state level and additional challenges may arise if

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construction proceeds. Processes are in place that are designed to assure compliance with the requirements specified in the Westinghouse Design Control Document and the combined construction and operating licenses, including inspections by Southern Nuclear and the Nuclear Regulatory Commission that occur throughout construction. As a result of such compliance processes, certain license amendment requests have been filed and approved or are pending before the Nuclear Regulatory Commission. Various design and other licensing-based compliance matters, including the timely resolution of Inspections, Tests, Analyses, and Acceptance Criteria and the related approvals by the Nuclear Regulatory Commission, may arise if construction proceeds, which may result in additional license amendments or require other resolution. If any license amendment requests or other licensing-based compliance issues are not resolved in a timely manner, there may be further delays in the project schedule that could result in increased costs.

If construction continues, the risk remains that challenges with labor productivity, fabrication, delivery, assembly, and installation of plant systems, structures, and components, or other issues could arise and may further impact project schedule and cost.

The ultimate outcome of these matters cannot be determined at this time.

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

General

We are a Georgia electric membership corporation (an EMC) incorporated in 1974 and headquartered in metropolitan Atlanta. We are owned by our 38 retail electric distribution cooperative members. Our members are consumer-owned distribution cooperatives providing retail electric service in Georgia on a not-for-profit basis. Our principal business is providing wholesale electric power to our members, which we provide primarily from our generation assets and, to a lesser extent, from power purchased from other suppliers. As with cooperatives generally, we operate on a not-for-profit basis.

Results of Operations

For the Six Months Ended June 30, 2017 and 2016

Net Margin

Our net margins for the three-month and six-month periods ended June 30, 2017 were $21.4 million and $42.9 million compared to $23.3 million and $43.9 million for the same periods of 2016. Through June 30, 2017, we collected approximately 83% of our targeted net margin of $51.8 million for the year ending December 31, 2017. These collections are typical as our capacity revenues are generally recorded evenly throughout the year and our management generally budgets conservatively. We anticipate our board of directors will approve a budget adjustment by the end of the year so margins will achieve, but not exceed, the targeted margins for interest ratio. For additional information regarding our net margin requirements and policy, see "Item 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Summary of Cooperative Operations—Margins" in our 2016 Form 10-K.

Operating Revenues

Our operating revenues fluctuate from period to period based on several factors, including fuel costs, weather and other seasonal factors, load requirements in our members' service territories, operating costs, availability of electric generation resources, our decisions of whether to dispatch our owned, purchased or member-owned resources over which we have dispatch rights, and our members' decisions of whether to purchase a portion of their hourly energy requirements from our resources or from other suppliers.

Sales to Members.    We generate revenues principally from the sale of electric capacity and energy to our members. Capacity revenues are the revenues we receive for electric service whether or not our generation and purchased power resources are dispatched to produce electricity, and are designed to recover the fixed costs associated with our business, including fixed production expenses, depreciation and amortization expenses and interest charges, plus a targeted margin. Energy revenues are earned by selling electricity to our members, which involves generating or purchasing electricity for our members. Energy revenues recover the variable costs of our business, including fuel, purchased energy and variable operation and maintenance expense.

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The components of member revenues for the three-month and six-month periods ended June 30, 2017 and 2016 were as follows:

		Three Months Ended June 30,					2017 vs. 2016 % Change		Six Months Ended June 30,					2017 vs. 2016 % Change
		(dollars in thousands)							(dollars in thousands)
		2017			2016				2017			2016
Capacity revenues	$	223,080		$	228,449		(2.4%)	$	448,308		$	453,373		(1.1%)
Energy revenues		143,993			150,705		(4.5%)		272,909			273,878		(0.4%)
Total	$	367,073		$	379,154		(3.2%)	$	721,217		$	727,251		(0.8%)
MWh Sales to members		5,925,578			6,549,671		(9.5%)		11,250,401			11,930,532		(5.7%)
Cents/kWh		6.19			5.79		7.0%		6.41			6.10		5.2%
Member energy requirements supplied		64	%		69	%			64	%		64	%

Energy revenues from members decreased for the three-month and six-month periods ended June 30, 2017 compared to the same periods in 2016 primarily due to a decrease in generation for member sales during the second quarter of 2017. The effect of the decrease in generation on energy revenue was somewhat offset by 4.0% and 5.1% increases in the average energy cost per kilowatt-hour generated for the respective three-month and six-month periods ended June 30, 2017 compared to the same periods in 2016. For a discussion of fuel costs, which are the primary components of energy revenues, see "—Operating Expenses."

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Operating Expenses

The following table summarizes our fuel costs and megawatt-hour generation by generating source.

		Cost				Generation			Cents per kWh
		(dollars in thousands)				(MWh)
		Three Months Ended June 30,			2017 vs.	Three Months Ended June 30,		2017 vs.	Three Months Ended June 30,		2017 vs.
Fuel Source		2017		2016	2016 % Change	2017	2016	2016 % Change	2017	2016	2016 % Change
Coal	$	31,313	$	33,191	(5.7%)	1,094,066	1,136,430	(3.7%)	2.86	2.92	(2.0%)
Nuclear		22,747		21,031	8.2%	2,536,188	2,596,627	(2.3%)	0.90	0.81	10.7%
Gas:
Combined Cycle		52,433		50,560	3.7%	2,177,166	2,395,362	(9.1%)	2.41	2.11	14.1%
Combustion Turbine		12,231		21,806	(43.9%)	294,414	638,007	(53.9%)	4.15	3.42	21.5%
	$	118,724	$	126,588	(6.2%)	6,101,834	6,766,426	(9.8%)	1.95	1.87	4.0%

		Cost				Generation			Cents per kWh
		(dollars in thousands)				(MWh)
		Six Months Ended June 30,			2017 vs.	Six Months Ended June 30,		2017 vs.	Six Months Ended June 30,		2017 vs.
Fuel Source		2017		2016	2016 % Change	2017	2016	2016 % Change	2017	2016	2016 % Change
Coal	$	50,943	$	65,484	(22.2%)	1,755,201	2,241,460	(21.7%)	2.90	2.92	(0.7%)
Nuclear		43,289		39,835	8.7%	4,813,686	4,914,137	(2.0%)	0.90	0.81	10.9%
Gas:
Combined Cycle		114,160		92,051	24.0%	4,658,163	4,361,845	6.8%	2.45	2.11	16.1%
Combustion Turbine		14,246		28,170	(49.4%)	337,220	797,485	(57.7%)	4.22	3.53	19.6%
	$	222,638	$	225,540	(1.3%)	11,564,270	12,314,927	(6.1%)	1.93	1.83	5.1%

Total fuel costs decreased for the three-month and six-month periods ended June 30, 2017 compared to the same periods of 2016 primarily due to lower natural gas-fired generation during the second quarter of 2017. This decline in natural gas-fired generation was due to a combination of i) increased natural gas prices, ii) moderate temperatures, and iii) planned maintenance outages.

Financial Condition

Balance Sheet Analysis as of June 30, 2017

Assets

Cash used for property additions for the six-month period ended June 30, 2017 totaled $474.7 million. Of this amount, approximately $418.8 million was associated with construction expenditures for Vogtle Units No. 3 and No. 4 and $31.9 million for nuclear fuel purchases.

Restricted investments consist of funds on deposit with the Rural Utilities Service in the Cushion of Credit Account. The funds, including interest earned thereon, can only be applied to debt service on our Rural Utilities Service-guaranteed Federal Financing Bank notes. Decisions regarding when to apply the funds are guided by the interest rate environment and our anticipated liquidity needs.

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Equity and Liabilities

Long-term debt and capital leases due within one year decreased $162.1 million during the six-month period ended June 30, 2017. In January 2017, we temporarily refinanced $122.6 million of variable rate pollution control revenue bonds through the issuance of commercial paper. In addition, we made quarterly Federal Financing Bank note payments, when due, during the period.

Short-term borrowings, which primarily provide interim financing for Vogtle Units No. 3 and No. 4 construction costs, increased $425.9 million during the six-month period ended June 30, 2017. In addition to providing financing for the Vogtle project, $122.6 million of the increase was attributable to the temporary refinancing of variable rate pollution control revenue bonds in January 2017.

Accounts payable increased $65.9 million for the six-month period ended June 30, 2017 primarily as a result of a $83.7 million increase in the payable to Georgia Power Company for operation and maintenance costs for our co-owned plants and capital costs associated with Vogtle Units No. 3 and No. 4. Offsetting the increase was $17.2 million in credits applied to our members' bills in the first quarter of 2017, for a board approved reduction in 2016 revenue requirements as a result of margin collections in excess of our 2016 target.

Accrued interest decreased $31.9 million for the six-month period ended June 30, 2017 primarily as a result of amounts paid, when due, of Federal Financing Bank note payments.

The current portion of member power bill prepayments decreased $57.0 million for the six-month period ended June 30, 2017 due to the application of credits against the power bills of members that participate in the power bill prepayment program. For additional information on the member power bill prepayment program, see Note J of Notes to Unaudited Consolidated Financial Statements.

Capital Requirements and Liquidity and Sources of Capital

Vogtle Units No. 3 and No. 4

We, Georgia Power, the Municipal Electric Authority of Georgia, and the City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, doing business as Dalton Utilities (collectively, the Co-owners) are parties to an Ownership Participation Agreement that, along with other agreements, governs our participation in two additional nuclear units at Plant Vogtle, Units No. 3 and No. 4. The Co-owners appointed Georgia Power to act as agent under this agreement. Our binding ownership interest and proportionate share of the cost to construct these units is 30%. Pursuant to this agreement, Georgia Power has designated Southern Nuclear Operating Company, Inc. as its agent for licensing, engineering, procurement, contract management, construction and pre-operation services.

In 2008, Georgia Power, acting for itself and as agent for the Co-owners, entered into an Engineering, Procurement and Construction Agreement (the EPC Agreement) with Westinghouse Electric Company LLC and Stone & Webster, Inc. (collectively, the EPC Contractor). Stone & Webster was subsequently acquired by Westinghouse and changed its name to WECTEC Global Project Services Inc. (WECTEC). Pursuant to the EPC Agreement, the EPC Contractor agreed to design, engineer, procure, construct and test two 1,100 megawatt nuclear units using the Westinghouse AP1000 technology and related facilities at Plant Vogtle.

Under the EPC Agreement, the Co-owners agreed to pay a purchase price that is subject to certain price escalations and adjustments, including fixed escalation amounts and certain index-based adjustments, as well as adjustments for change orders and performance bonuses. The EPC Agreement also provided for liquidated damages upon the EPC Contractor's failure to fulfill the schedule and certain performance guarantees, each subject to an aggregate cap of 10% of the contract price, or approximately $920 million.

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Toshiba Corporation guaranteed certain payment obligations of the EPC Contractor under the EPC Agreement (the Toshiba Guarantee), including any liability of the EPC Contractor for abandonment of work. In January 2016, Westinghouse delivered to the Co-owners $920 million of letters of credit from financial institutions (Westinghouse Letters of Credit) to secure a portion of the EPC Contractor's potential obligations under the EPC Agreement. The Westinghouse Letters of Credit are subject to annual renewals through June 30, 2020, and require 60 days' written notice to Georgia Power, as agent of the Co-owners, in the event the Westinghouse Letters of Credit will not be renewed.

Under the terms of the EPC Agreement, the EPC Contractor did not have the right to terminate the EPC Agreement for convenience. In the event of an abandonment of work by the EPC Contractor, the maximum liability of the EPC Contractor under the EPC Agreement was 40% of the contract price, or $3.68 billion, of which our proportionate share is approximately $1.1 billion.

On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. To provide for a continuation of work at Vogtle Units No. 3 and No. 4, Georgia Power, acting for itself and as agent for the other Co-owners, entered into an Interim Assessment Agreement with the EPC Contractor and WECTEC Staffing Services LLC which the bankruptcy court approved on March 30, 2017.

The Interim Assessment Agreement provided, among other items, that during the term of the Interim Assessment Agreement (i) Georgia Power was obligated to pay, on behalf of the Co-owners, all costs accrued by the EPC Contractor for subcontractors and vendors for services performed or goods provided, with these amounts paid to the EPC Contractor, except that amounts accrued for Fluor Corporation (Fluor) were to be paid directly to Fluor; (ii) the EPC Contractor was to provide certain engineering, procurement and management services for Vogtle Units No. 3 and No. 4, to the same extent as contemplated by the EPC Agreement, and Georgia Power, on behalf of the Co-owners, made payments of $5.4 million per week for these services; (iii) Georgia Power had the right to make payments, on behalf of the Co-owners, directly to subcontractors and vendors who had accounts past due with the EPC Contractor; (iv) the EPC Contractor was to use commercially reasonable efforts to provide information reasonably requested by Georgia Power as was necessary to continue construction and investigation of the completion status of Vogtle Units No. 3 and No. 4; (v) the EPC Contractor was to reject or accept the EPC Agreement by the termination of the Interim Assessment Agreement; and (vi) Georgia Power, on behalf of the Co-owners, would not exercise any remedies against Toshiba under the Toshiba Guarantee. Under the Interim Assessment Agreement, all parties expressly reserved all rights and remedies under the EPC Agreement and all related security and collateral under applicable law.

The Interim Assessment Agreement, as amended, expired on July 27, 2017. The Co-owners' aggregate liability under the Interim Assessment Agreement totaled approximately $650 million, of which our proportionate share totaled approximately $195 million. As of June 30, 2017, $552 million of this aggregate liability had been paid or accrued by Georgia Power, on behalf of the Co-owners.

Subsequent to the EPC Contractor's bankruptcy filing, a number of subcontractors to the EPC Contractor, including Fluor Enterprises, Inc., a subsidiary of Fluor, alleged non-payment by the EPC Contractor for amounts owed for work performed on Vogtle Units No. 3 and No. 4. Georgia Power, acting for itself and as agent for the Co-owners, has taken, and continues to take, actions to remove liens filed by these subcontractors through the posting of surety bonds. Georgia Power estimates the aggregate liability, through July 31, 2017, of the Co-owners for the removal of subcontractor liens and payment of other EPC Contractor pre-petition accounts payable to total approximately $400 million, of which our proportionate share would total approximately $120 million. As of June 30, 2017, $354 million of this aggregate liability had been paid or accrued by Georgia Power, on behalf of the Co-owners.

On June 9, 2017, Georgia Power and the other Co-owners and Toshiba entered into a settlement agreement regarding the Toshiba Guarantee (the Guarantee Settlement Agreement). Pursuant to the

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Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion (the Guarantee Obligations), of which our proportionate share is approximately $1.1 billion, and that the Guarantee Obligations exist regardless of whether Vogtle Units No. 3 and No. 4 are completed. The Guarantee Settlement Agreement also provides for a schedule of payments for the Guarantee Obligations, beginning in October 2017 and continuing through January 2021. In the event Toshiba receives certain payments, including sale proceeds, from or related to Westinghouse (or its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or its subsidiaries), it will hold a portion of such payments in trust for the Co-owners and promptly pay them over as offsets against any remaining Guarantee Obligations. Under the Guarantee Settlement Agreement, the Co-owners will forbear from exercising remedies in respect of the Toshiba Guarantee, including drawing on the Westinghouse Letters of Credit, until June 30, 2020, unless certain events of nonpayment, insolvency, or other material breach of the Guarantee Settlement Agreement by Toshiba occur. If such an event occurs, the balance of the Guarantee Obligations will become immediately due and payable, and the Co-owners may exercise any and all rights and remedies, including drawing on the Westinghouse Letters of Credit without restriction. In addition, the Guarantee Settlement Agreement does not restrict the Co-owners from fully drawing on the Westinghouse Letters of Credit in the event they are not renewed or replaced prior to the expiration date.

On August 10, 2017, Toshiba released its financial results for the first quarter of fiscal year 2017, which reflected a negative shareholders' equity balance of approximately $4.5 billion as of June 30, 2017. Toshiba also announced the existence of material events and conditions that raise substantial doubt about Toshiba's ability to continue as a going concern. As a result, substantial risk regarding the Co-owners' ability to fully collect the Guarantee Obligations continues to exist. An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Co-owners of Vogtle Units No. 3 and No. 4, and, therefore, on our financial condition and results of operations as well.

Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Co-owners, and the EPC Contractor entered into a services agreement, which was amended and restated on July 20, 2017 (as amended and restated, the Services Agreement), for the EPC Contractor to transition construction management of Vogtle Units No. 3 and No. 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 20, 2017, the bankruptcy court approved the EPC Contractor's motion seeking authorization to (i) enter into the Services Agreement, (ii) assume and assign to the Co-owners certain project-related contracts, (iii) join the Co-owners as counterparties to certain assumed project-related contracts, and (iv) reject the EPC Agreement. The Services Agreement became effective upon approval by the Department of Energy on July 27, 2017 and will continue until the start-up and testing of Vogtle Units No. 3 and No. 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Co-owners upon 30 days' written notice.

Georgia Power and the other Co-owners are continuing to conduct a comprehensive schedule and cost-to-complete assessment, as well as a cancellation cost assessment, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule of Vogtle Units No. 3 and No. 4. As of June 30, 2017, our total investment in the additional Vogtle units was approximately $3.7 billion.

If construction continues on Vogtle Units No. 3 and No. 4, based on Oglethorpe's preliminary assessment, we expect our project budget to range from approximately $6.5 billion to $7.3 billion, including a contingency amount. These estimates assume commercial operation dates that range from mid-2021 to mid-2022 for Unit 3 and a year later for Unit 4. They also assume 100% recovery of our $1.1 billion share of the Guarantee Obligations from Toshiba. Prior to the EPC Contractor bankruptcy, our project budget was $5 billion under the "fixed price" EPC Agreement. As the EPC Agreement has been rejected in bankruptcy, this preliminary budget range represents potential costs based on various assumptions regarding cost and schedule to complete the additional Vogtle Units. We anticipate

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Southern Nuclear will manage the project toward the lower end of our budget range; however, we are conservatively planning around the upper end of our range. The risk remains that cost and schedule could exceed the upper end of this range if we go forward with the project. We anticipate our total monthly costs, including interest during construction, through the remainder of 2017 to be approximately $70 million per month, which assumes we receive our proportionate share of the proceeds from the Toshiba Guarantee Settlement Agreement. Should construction continue, our total monthly costs will vary over time and will decline significantly as the project nears completion.

If the Co-owners determine to suspend or cancel the Vogtle project, based on the most recent assessment results, the Co-owners' aggregate cancellation costs are estimated to range from approximately $700 million to $800 million, of which our proportionate share would be approximately $210 million to $240 million. As of June 30, 2017, our total investment in the additional Vogtle units was approximately $3.7 billion. Depending upon the circumstances of suspending the additional Vogtle units, we would determine the appropriate accounting treatment for our investment in the Vogtle units. If the investment were to be written off, we would seek regulatory accounting treatment to amortize the investment over a long-term period which requires the approval of our board of directors, and we would submit the regulatory accounting treatment details to the Rural Utilities Service for its approval.

We intend to continue working with Georgia Power and the other Co-owners to determine future actions related to Vogtle Units No. 3 and No. 4. Georgia Power has stated that it is working with the Georgia Public Service Commission in regards to this same determination. Georgia Power has stated further that it expects to include a recommendation regarding completion of the additional Vogtle units in its Vogtle Construction Monitoring report to be filed with the Georgia Public Service Commission in late August 2017.

We have a $3.1 billion federal loan guarantee from the Department of Energy, under which we have advanced $1.7 billion as of June 30, 2017. We have also financed an additional $1.4 billion of the capital costs of the Vogtle units through capital market debt issuances. Pursuant to the terms of the Loan Guarantee Agreement, no further advances are permitted pending a determination to continue construction of the additional Vogtle units and satisfaction of related conditions. In addition to certain other events, if the Co-owners determine not to continue construction on the additional Vogtle units or certain obligations related to continuing construction are not met by December 31, 2017, the Department of Energy will have discretion to require that we repay all amounts outstanding under the Loan Guarantee Agreement over a five-year period. For additional information regarding conditions for future advances, potential repayment over a five year period, covenants and events of default under the Loan Guarantee Agreement with the Department of Energy, see Note K of Notes to Unaudited Consolidated Financial Statements and for additional information regarding the financing of Vogtle Units No. 3 and No. 4, see "Financing Activities—Department of Energy-Guaranteed Loan."

There have been technical and procedural challenges to the construction and licensing of Vogtle Units No. 3 and No. 4 at the federal and state level and additional challenges may arise if construction proceeds. Processes are in place that are designed to assure compliance with the requirements specified in the Westinghouse Design Control Document and the combined construction and operating licenses, including inspections by Southern Nuclear and the Nuclear Regulatory Commission that occur throughout construction. As a result of such compliance processes, certain license amendment requests have been filed and approved or are pending before the Nuclear Regulatory Commission. Various design and other licensing-based compliance matters, including the timely resolution of Inspections, Tests, Analyses, and Acceptance Criteria and the related approvals by the Nuclear Regulatory Commission, may arise if construction proceeds, which may result in additional license amendments or require other resolution. If any license amendment requests or other licensing-based compliance issues are not resolved in a timely manner, there may be further delays in the project schedule that could result in increased costs.

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If construction continues, the risk remains that challenges with labor productivity, fabrication, delivery, assembly, and installation of plant systems, structures, and components, or other issues could arise and may further impact project schedule and cost.

The ultimate outcome of these matters cannot be determined at this time. See "Risk Factors" in this Form 10-Q for risks regarding the EPC Contractor's bankruptcy and the Toshiba Guarantee and "Item 1A—RISK FACTORS" in our 2016 Form 10-K for a discussion of certain risks associated with the licensing, construction, financing and operation of nuclear generating units.

Environmental Regulations

Federal and state laws and regulations regarding environmental matters affect operations at our facilities. Following are some substantial developments relating to environmental regulations and litigation that have occurred since the filing of our Form 10-Q for the quarterly period ended March 31, 2017.

In response to several Executive Orders, the United States Environmental Protection Agency (EPA) is reviewing numerous rules related to the energy industry. Included are various rules related to climate change and the emissions of greenhouse gases, other Clean Air Act-based rules and some Clean Water Act-based regulations. Of these, final rules in litigation are generally being reconsidered by EPA, with the litigation at least temporarily paused (and, in some cases stopped) while the reconsideration proceeds. Other rules not yet finalized are undergoing further scrutiny within the context of the rulemaking process. Guidance on related issues has been withdrawn and is no longer appropriate for use in regulatory actions by relevant agencies, including permitting activities. Following are some example of these occurrences.

EPA has announced that it is reviewing and, if appropriate, will initiate proceedings to suspend, revise or rescind the Clean Power Plan and the New Source Performance Standards (NSPS) for greenhouse gas emissions from electric utility generating units. In addition, EPA is reconsidering the 2015 rule that established amended effluent limitations guidelines and standards for the steam electric power generating point source category, and has postponed certain compliance dates associated with those revised standards. In April 2017, the U.S. Court of Appeals for the District of Columbia Circuit ordered that the consolidated cases challenging EPA's issuance of a State Implementation Plan Call, requiring 37 states to revise and submit for EPA approval their provisions dealing with emissions from startup, shutdown and malfunction be held in abeyance pending EPA review of that rule. On July 27, 2017, EPA formally proposed a rule rescinding the recently-finalized definition of "Waters of the United States" and re-codifying the previous established definition. Litigation challenging these rules has been at least paused while EPA considers further moves to address such challenges in the context of the reconsideration process. In addition, the Office of Management and Budget has withdrawn its guidance on the social cost of carbon, and the Council on Environmental Quality has withdrawn its guidance for federal agencies on the consideration of greenhouse gas emissions and the effect of climate change in National Environmental Policy Act reviews.

On June 2, 2017, EPA finalized a rule that approves Georgia's maintenance plan for the Atlanta area and redesignated the area to attainment for the 2008 8-hour ozone National Ambient Air Quality Standards (NAAQS). On June 28, 2017, citing insufficient information, EPA announced that it would extend the deadline for promulgating initial area designations for the 2015 ozone NAAQS to October 18, 2018. However, on August 3, 2017, EPA announced that it would be withdrawing its notice of a 1-year extension and reinstating the original October 1, 2017 deadline for promulgating designations. The Withdrawal Notice indicates that there may be areas for which designations could be promulgated in the next few months, while extensions of time for other areas may be warranted, although such determinations have not yet been made. When made, the designations will trigger a statutory timeline for states to finalize emissions reduction plans to meet the 2015 ozone standard.

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Additionally, on July 14, 2017, EPA signed a proposed rule that would retain without revision the current NAAQS for nitrogen dioxide (NO₂).

We continue to evaluate all EPA actions regarding reviews and reconsiderations of final rules and processing of proposed rules and cannot predict the outcome of these rulemakings, any related state rulemakings or any related litigation, including litigation that might be brought to challenge the issuance of replacement or new final rules. It is unknown what impact potential rule changes will have on our and our members' operations. Continued uncertainty related to the status of current and future environmental regulations may make long-term planning decisions more difficult.

In November 2015, the Paris Agreement was adopted at the United Nations 21st International Climate Change Conference. It established a non-binding universal framework for addressing greenhouse gas emissions based on nationally determined commitments, as well as a process for increasing those commitments going forward. In June 2017, President Trump issued a statement that the United States would be withdrawing from the Paris Agreement, and would be open to negotiating a new agreement with the signatory nations on the 2015 Agreement. The ultimate impact of the United States' anticipated withdrawal cannot be determined at this time, nor can we predict the form that any future agreement might take.

For further discussion regarding potential effects on our business from environmental regulations, including potential capital requirements, see "Item 1—BUSINESS—REGULATION—Environmental," "Item 1A—RISK FACTORS" and "Item 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Financial Condition—Capital Requirements—Capital Expenditures" in our 2016 Form 10-K.

Liquidity

At June 30, 2017, we had $1.1 billion of unrestricted available liquidity to meet our short-term cash needs and liquidity requirements. This amount included $286 million in cash and cash equivalents and $830 million of unused and available committed credit arrangements.

At June 30, 2017, we had $1.61 billion of committed credit arrangements in place, the details of which are reflected in the table below:

Committed Credit Facilities
		Authorized Amount		Available June 30, 2017		Expiration Date
		(dollars in millions)
Unsecured Facilities:
Syndicated Line of Credit led by CFC	$	1,210	$	546	(1)	March 2020
CFC Line of Credit(2)		110		110		December 2018
JPMorgan Chase Line of Credit		150		34	(3)	October 2018
Secured Facilities:
CFC Term Loan(2)		250		250		December 2018

⁽¹⁾

Of the portion of this facility that was unavailable at June 30, 2017, $528 million was dedicated to support outstanding commercial paper and $136 million was related to letters of credit issued to support variable rate demand bonds.

⁽²⁾

Any amounts drawn under the $110 million unsecured line of credit with CFC will reduce the amount that can be drawn under the $250 million secured term loan. Any amounts borrowed under the $250 million term loan would be secured under our first mortgage indenture, with a maturity no later than December 31, 2043.

⁽³⁾

Of the portion of this facility that was unavailable at June 30, 2017, $114 million related to letters of credit issued to support variable rate demand bonds and $2 million related to letters of credit issued to post collateral to third parties.

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Currently, we are primarily using our commercial paper program to provide interim funding for payments related to the construction of Vogtle Units No. 3 and No. 4 prior to receiving advances of long-term funding under the Department of Energy-guaranteed Federal Financing Bank loan. See Note K(a) of Notes to Unaudited Consolidated Financial Statements for a discussion of recent amendments that were made to the loan guarantee agreement with the Department of Energy which restrict our ability to request further loan advances pending a determination to continue construction of the additional Vogtle units and satisfaction of related conditions. Despite our current robust liquidity position, this constraint on our ability to request further loan advances from the Department of Energy will reduce our available liquidity while construction of the units continues until we are able to advance funds again or unless we access alternative funding sources. Our liquidity will also be constrained if the project is suspended or canceled, as that would trigger the commencement of the five-year amortization period on the debt advanced under the Department of Energy loan. However, we believe the impact to liquidity would only be temporary pending expected refinancing of the commercial paper and the Department of Energy debt in the capital markets. In addition, payments relating to the cost of cancelling the project would commence which could also impact liquidity until permanent financing of those costs is put in place.

Under our commercial paper program, we are authorized to issue commercial paper in amounts that do not exceed the amount of our committed backup lines of credit, thereby providing 100% dedicated support for any commercial paper outstanding. Our commercial paper program is currently sized at $1.0 billion.

Under our unsecured committed lines of credit, we have the ability to issue letters of credit totaling $760 million in the aggregate, of which $509 million remained available at June 30, 2017. However, amounts related to issued letters of credit reduce the amount that would otherwise be available to draw for working capital needs. Also, due to the requirement to have 100% dedicated backup for any commercial paper outstanding, any amounts drawn under our committed credit facilities for working capital or related to issued letters of credit will reduce the amount of commercial paper that we can issue. The majority of our outstanding letters of credit are for the purpose of providing credit enhancement on variable rate demand bonds.

Two of our credit facilities contain a financial covenant that requires us to maintain minimum levels of patronage capital. At June 30, 2017, the required minimum level was $675 million and our actual patronage capital was $903 million. These agreements contain an additional covenant that limits our secured indebtedness and unsecured indebtedness, both as defined in the credit agreements, to $12.0 billion and $4.0 billion, respectively. At June 30, 2017, we had $8.2 billion of secured indebtedness and $528 million of unsecured indebtedness outstanding.

At June 30, 2017, we had $394 million on deposit in the Rural Utilities Service Cushion of Credit Account, all of which is classified as a restricted investment. See "—Balance Sheet Analysis as of June 30, 2017—Assets" for more information regarding this account.

Financing Activities

First Mortgage Indenture.    At June 30, 2017, we had $8.1 billion of long-term debt outstanding under our first mortgage indenture secured equally and ratably by a lien on substantially all of our owned tangible and certain of our intangible property, including property we acquire in the future. See "Item 1—BUSINESS—OGLETHORPE POWER CORPORATION—First Mortgage Indenture" in our 2016 Form 10-K for further discussion of our first mortgage indenture.

Rural Utilities Service-Guaranteed Loans.    At June 30, 2017, we had two approved Rural Utilities Service-guaranteed loans being funded through the Federal Financing Bank that are in various stages of being drawn down. These two loans totaled $678 million with $501 million remaining to be

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advanced. When advanced, the debt will be secured under our first mortgage indenture. As of June 30, 2017, we had $2.5 billion of debt outstanding under various Rural Utilities Service-guaranteed loans.

Department of Energy-Guaranteed Loan.    In 2014, we closed on a loan with the Department of Energy that will fund up to the lesser of $3.1 billion or 70% of eligible project costs related to the cost to construct our 30% undivided share of Vogtle Units No. 3 and No. 4. This loan is being funded by the Federal Financing Bank and is backed by a federal loan guarantee provided by the Department of Energy.

As of June 30, 2017, we had advanced $1.7 billion under this loan and had $1.4 billion remaining to be advanced. All of the debt under this loan will be secured ratably with all other debt under our first mortgage indenture. Access to the committed funds under this loan requires us to meet certain conditions related to our business and the Vogtle project and also requires certain third-parties related to the Vogtle project to comply with certain laws. In addition, in connection with the bankruptcy of the EPC Contractor, the loan guarantee agreement with the Department of Energy was amended to restrict our ability to request further loan advances from the Department Of Energy pending a determination to continue construction on the additional Vogtle units and satisfaction of related conditions. Under certain circumstances, including a decision not to continue construction of the Vogtle units, the Department of Energy has discretion to require that we repay all amounts outstanding under the loan over a five-year period.

For additional information regarding this loan and the recent amendments made to the loan guarantee agreement with the Department of Energy, see Note K(a) of Notes to Unaudited Consolidated Financial Statements.

In addition to the Department of Energy loan funding, we have issued $1.4 billion of first mortgage bonds to finance a substantial portion of the Vogtle expansion that will not be funded by the Department of Energy. As of June 30, 2017, we had $3.1 billion of long-term funding in place for the $3.7 billion invested in the Vogtle project to-date. Depending on the final Vogtle project cost if completed, and the amounts we are able to advance under the Department of Energy-guaranteed loan, there may be a need for additional capital market financing.

For more detailed information regarding our financing plans, see "Item 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Financial Condition—Financing Activities" in our 2016 Form 10-K.

Newly Adopted or Issued Accounting Standards

For a discussion of recently issued or adopted accounting pronouncements, see Note E of Notes to Unaudited Consolidated Financial Statements.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

There have not been any material changes to market risks from those reported in "Item 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK" of our 2016 Form 10-K.

Item 4.    Controls and Procedures

As of June 30, 2017, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective.

There have been no changes in internal control over financial reporting or other factors that occurred during the quarter ended June 30, 2017 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1.    Legal Proceedings

Patronage Capital Litigation

On June 9, 2017, the Georgia Court of Appeals upheld the Superior Court of DeKalb County's decision to dismiss on all counts both of the cases described under "Part I—Item 3 Legal Proceedings—Patronage Capital Litigation" in our 2016 Form 10-K. The plaintiffs did not further appeal these dismissals to the Georgia Supreme Court and the appeal period has since expired, ending this litigation.

Item 1A.    Risk Factors

Except as discussed below, there have been no material changes from the risk factors disclosed in "Item 1A—RISK FACTORS" in our 2016 Form 10-K.

The bankruptcy filing of the EPC Contractor is expected to have a material impact on the construction cost and schedule of Vogtle Units No. 3 and No. 4 and could have a material impact on our financial condition and results of operations, and any inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the cost to the Co-owners of Vogtle Units No. 3 and No. 4, and therefore on our financial condition and results of operations.

On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. To provide for a continuation of work with respect to Vogtle Units No. 3 and No. 4, Georgia Power, acting for itself and as agent for the Co-owners, entered into the Interim Assessment Agreement, which the bankruptcy court approved on March 30, 2017.

The Interim Assessment Agreement provided, among other items, that during the term of the Interim Assessment Agreement (i) Georgia Power was obligated to pay, on behalf of the Co-owners, all costs accrued by the EPC Contractor for subcontractors and vendors for services performed or goods provided, with these amounts paid to the EPC Contractor, except that amounts accrued for Fluor Corporation (Fluor) were to be paid directly to Fluor; (ii) the EPC Contractor was to provide certain engineering, procurement and management services for Vogtle Units No. 3 and No. 4, to the same extent as contemplated by the EPC Agreement, and Georgia Power, on behalf of the Co-owners, made payments of $5.4 million per week for these services; (iii) Georgia Power had the right to make payments, on behalf of the Co-owners, directly to subcontractors and vendors who had accounts past due with the EPC Contractor; (iv) the EPC Contractor was to use commercially reasonable efforts to provide information reasonably requested by Georgia Power as was necessary to continue construction and investigation of the completion status of Vogtle Units No. 3 and No. 4; (v) the EPC Contractor was to reject or accept the EPC Agreement by the termination of the Interim Assessment Agreement; and (vi) Georgia Power, on behalf of the Co-owners, would not exercise any remedies against Toshiba under the Toshiba Guarantee. Under the Interim Assessment Agreement, all parties expressly reserved all rights and remedies under the EPC Agreement and all related security and collateral under applicable law.

The Interim Assessment Agreement, as amended, expired on July 27, 2017. The Co-owners' aggregate liability under the Interim Assessment Agreement totaled approximately $650 million, of which our proportionate share totaled approximately $195 million. As of June 30, 2017, $552 million of this aggregate liability had been paid or accrued by Georgia Power on behalf of the Co-owners.

Subsequent to the EPC Contractor's bankruptcy filing, a number of subcontractors to the EPC Contractor, including Fluor Enterprises, Inc., a subsidiary of Fluor, alleged non-payment by the EPC Contractor for amounts owed for work performed on Vogtle Units No. 3 and No. 4. Georgia Power, acting for itself and as agent for the Co-owners, has taken, and continues to take, actions to remove liens filed by these subcontractors through the posting of surety bonds. Georgia Power estimates the

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aggregate liability, through July 31, 2017, of the Co-owners for the removal of subcontractor liens and payment of other EPC Contractor pre-petition accounts payable to total approximately $400 million, of which our proportionate share would total approximately $120 million. As of June 30, 2017, $354 million of this aggregate liability had been paid or accrued by Georgia Power on behalf of the Co-owners.

The EPC Agreement also provided for liquidated damages upon the EPC Contractor's failure to fulfill the schedule and certain performance guarantees, each subject to an aggregate cap of 10% of the contract price, or approximately $920 million. Under the Toshiba Guarantee, Toshiba guaranteed certain payment obligations of the EPC Contractor under the EPC Agreement, including any liability of the EPC Contractor for abandonment of work. In January 2016, Westinghouse delivered to the Co-owners $920 million of letters of credit from financial institutions (Westinghouse Letters of Credit) to secure a portion of the EPC Contractor's potential obligations under the EPC Agreement. The Westinghouse Letters of Credit are subject to annual renewals through June 30, 2020, and require 60 days' written notice to Georgia Power, as agent of the Co-owners, in the event the Westinghouse Letters of Credit will not be renewed.

Under the terms of the EPC Agreement, the EPC Contractor did not have the right to terminate the EPC Agreement for convenience. In the event of an abandonment of work by the EPC Contractor, the maximum liability of the EPC Contractor under the EPC Agreement was 40% of the contract price, or $3.68 billion, of which our proportionate share is approximately $1.1 billion.

On June 9, 2017, Georgia Power and the other Co-owners and Toshiba entered into the Guarantee Settlement Agreement. Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the $3.68 billion amount of its Guarantee Obligations, of which our proportionate share is approximately $1.1 billion, and that the Guarantee Obligations exist regardless of whether Vogtle Units No. 3 and No. 4 are completed. The Guarantee Settlement Agreement also provides for a schedule of payments for the Guarantee Obligations, beginning in October 2017 and continuing through January 2021. In the event Toshiba receives certain payments, including sale proceeds, from or related to Westinghouse (or its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or its subsidiaries), it will hold a portion of such payments in trust for the Co-owners and promptly pay them over as offsets against any remaining Guarantee Obligations. Under the Guarantee Settlement Agreement, the Co-owners will forbear from exercising remedies in respect of the Toshiba Guarantee, including drawing on the Westinghouse Letters of Credit, until June 30, 2020, unless certain events of nonpayment, insolvency, or other material breach of the Guarantee Settlement Agreement by Toshiba occur. If such an event occurs, the balance of the Guarantee Obligations will become immediately due and payable, and the Co-owners may exercise any and all rights and remedies, including drawing on the Westinghouse Letters of Credit without restriction. In addition, the Guarantee Settlement Agreement does not restrict the Co-owners from fully drawing on the Westinghouse Letters of Credit in the event they are not renewed or replaced prior to the expiration date.

On August 10, 2017, Toshiba released its financial results for the first quarter of fiscal year 2017, which reflected a negative shareholders' equity balance of approximately $4.5 billion as of June 30, 2017. Toshiba also announced the existence of material events and conditions that raise substantial doubt about Toshiba's ability to continue as a going concern. As a result, substantial risk regarding the Co-owners' ability to fully collect the Guarantee Obligations continues to exist. An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Co-owners of Vogtle Units No. 3 and No. 4, and, therefore, on our financial condition and results of operations as well.

Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Co-owners, and the EPC Contractor entered into Services Agreement, for the EPC Contractor to transition construction management of Vogtle Units No. 3 and No. 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 20, 2017, the bankruptcy

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court approved the EPC Contractor's motion seeking authorization to (i) enter into the Services Agreement, (ii) assume and assign to the Co-owners certain project-related contracts, (iii) join the Co-owners as counterparties to certain assumed project-related contracts, and (iv) reject the EPC Agreement. The Services Agreement became effective upon approval by the Department of Energy on July 27, 2017 and will continue until the start-up and testing of Vogtle Units No. 3 and No. 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Co-owners upon 30 days' written notice.

Georgia Power and the other Co-owners are continuing to conduct a comprehensive schedule and cost-to-complete assessment, as well as a cancellation cost assessment, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule of Vogtle Units No. 3 and No. 4. As of June 30, 2017, our total investment in the additional Vogtle units was approximately $3.7 billion.

If construction continues on Vogtle Units No. 3 and No. 4, based on Oglethorpe's preliminary assessment, we expect our project budget to range from approximately $6.5 billion to $7.3 billion, including a contingency amount. These estimates assume commercial operation dates that range from mid-2021 to mid-2022 for Unit 3 and a year later for Unit 4. They also assume 100% recovery of our $1.1 billion share of the Guarantee Obligations from Toshiba. Prior to the EPC Contractor bankruptcy, our project budget was $5 billion under the "fixed price" EPC Agreement. As the EPC Agreement has been rejected in bankruptcy, this preliminary budget range represents potential costs based on various assumptions regarding cost and schedule to complete the additional Vogtle Units. We anticipate Southern Nuclear will manage the project toward the lower end of our budget range; however, we are conservatively planning around the upper end of our range. The risk remains that cost and schedule could exceed the upper end of this range if we go forward with the project. We anticipate our total monthly costs, including interest during construction through the remainder of 2017 to be approximately $70 million per month, which assumes we receive our proportionate share of the proceeds from the Toshiba Guarantee Settlement Agreement. Should construction continue, our total monthly costs will vary over time and will decline significantly as the project nears completion.

If the Co-owners determine to suspend or cancel the Vogtle project, based on the most recent assessment results, the Co-owners' aggregate cancellation costs are estimated to range from approximately $700 million to $800 million, of which our proportionate share would be approximately $210 million to $240 million. As of June 30, 2017, our total investment in the additional Vogtle units was approximately $3.7 billion. Depending upon the circumstances of suspending the additional Vogtle units, we would determine the appropriate accounting treatment for our investment in the Vogtle units. If the investment were to be written off, we would seek regulatory accounting treatment to amortize the investment over a long-term period which requires the approval of our board of directors, and we would submit the regulatory accounting treatment details to the Rural Utilities Service for its approval.

We intend to continue working with Georgia Power and the other Co-owners to determine future actions related to Vogtle Units No. 3 and No. 4. Georgia Power has stated that it is working with the Georgia Public Service Commission in regards to this same determination. Georgia Power has stated further that it expects to include a recommendation regarding completion of the additional Vogtle units in its Vogtle Construction Monitoring report to be filed in the Georgia Public Service Commission in late August 2017.

The EPC Contractor's bankruptcy filing is expected to have a material impact on the construction cost and schedule of Vogtle Units No. 3 and No. 4 and could have a material impact on our financial condition and results of operations. In addition, any inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a material impact on the cost to the Co-owners of the additional Vogtle units and, therefore, on our financial condition and results of operations.

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The ultimate outcome of these matters cannot be determined at this time. See "Item 1A—Risk Factors" in our 2016 Form 10-K for additional risks related to Vogtle Units No. 3 and No. 4. For additional information regarding the Vogtle project, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition—Capital Requirements and Liquidity and Sources of Capital—Vogtle Units No. 3 and No. 4."

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Not Applicable.

Item 3.    Defaults upon Senior Securities

Not Applicable.

Item 4.    Mine Safety Disclosures

Not Applicable.

Item 5.    Other Information

Not Applicable.

Item 6.    Exhibits

Number		Description
	4.1	Seventy-Third Supplemental Indenture, dated as of July 26, 2017, made by Oglethorpe to U.S. Bank National Association, as trustee, confirming the lien of the Indenture with respect to certain agreements and licenses.
	4.2	Amendment No. 1 to Loan Guarantee Agreement, dated as of June 4, 2015, between Oglethorpe and the Department of Energy.
	4.3	Amendment No. 2 to Loan Guarantee Agreement, dated as of March 9, 2016, between Oglethorpe and the Department of Energy.
	10.1	Amended and Restated Services Agreement, dated as of June 20, 2017, by and among Georgia Power Company, for itself and as agent for Oglethorpe, Municipal Electric Authority of Georgia, MEAG Power SPVJ, LLC, MEAG Power SPVM, LLC, MEAG Power SPVP, LLC, and The City of Dalton, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse Electric Company LLC and WECTEC Global Project Services Inc. (Incorporated by reference to Exhibit 10(c)(9) of Georgia Power Company's Form 10-Q for the quarterly period ended June 30, 2017, filed with the SEC on August 2, 2017.) (Georgia Power has requested confidential treatment for certain portions of this document pursuant to an application for confidential treatment sent to the SEC. Georgia Power omitted such portions from the filing and filed them separately with the SEC.)
	31.1	Rule 13a-14(a)/15d-14(a) Certification, by Michael L. Smith (Principal Executive Officer).
	31.2	Rule 13a-14(a)/15d-14(a) Certification, by Elizabeth B. Higgins (Principal Financial Officer).
	32.1	Certification Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Michael L. Smith (Principal Executive Officer).
	32.2	Certification Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Elizabeth B. Higgins (Principal Financial Officer).
	101	XBRL Interactive Data File.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Oglethorpe Power Corporation (An Electric Membership Corporation)
Date: August 10, 2017	By:	/s/ Michael L. Smith
		Michael L. Smith President and Chief Executive Officer
Date: August 10, 2017		/s/ Elizabeth B. Higgins
		Elizabeth B. Higgins Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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