Friday Matinee and AP1000 Construction Update

This week's ANS Nuclear Cafe Friday Matinee presents the very latest Vogtle Timeline construction update, which is part of a truly incredible video series developed by Georgia Power.

An Update on the Westinghouse Bankruptcy and AP1000 Projects

As was reported previously on ANS Nuclear Cafe, an interim project management period wherein the AP1000 plant owners directly paid the contractors and Westinghouse personnel itself ended on April 28.  At that time, both sets of owners revealed that the interim period had been extended - but also revealed that the specific time frame for each project differed.

On April 28, SCANA / Santee Cooper announced that their interim agreement with Westinghouse had been extended through June 26, 2017 and that operations would continue as they had during the original interim period.  At the same time, SCANA's earnings presentation for the first quarter of 2017 outlined that the company is "evaluating various options during the transition period," which includes the following:

• Continue with the construction of both V. C. Summer Units 2 and 3
• Focus effort on construction of one unit and delay construction of the other
• Continue construction of one unit, abandon the other, and seek to recover costs of the abandoned unit
• Abandon both units and seek to recover costs

In the event of abandonment of one or both units the costs incurred might be recovered under the provisions of the Base Load Review Act (BLRA), allowing rolling of capital costs for the plant into the rate base following review by the South Carolina Public Service Commission.

During the Investors Call on April 27 for SCANA, CFO Jimmy Addison remarked that "...any path forward would need to satisfy the growing generation needs of our customers. Our goal is to reach a decision that balances the needs of our customers, our stakeholders, and our Company."  The owners of the plant will continue to work during the interim period to develop a self-generated "cost to complete" estimate and road map for that completion which will be used to make the choice between the options listed above.

In a similar process, Georgia Power is working on its own cost-to-complete estimate and schedule for the Plant Vogtle expansion, but has only extended the interim agreement period through May 12, 2017 - a much shorter time.  In a press release on April 28, Georgia Power noted that "...the parties will continue to work on finalizing a new service agreement which would, if necessary, assure that Westinghouse continues to provide design, engineering and procurement services to Southern Nuclear as a part of their assumption of control over construction management."  (The word their refers to Southern Nuclear.)

It's clear then that both sets of owners of the two AP1000 plant construction projects are working diligently to determine what path to take, assuming perhaps in the worst case that Westinghouse simply walks away from the EPC contract entirely (which it may do under the bankruptcy court's supervision in order to relieve itself of debt.)  In this case, the owners will have to finish the engineering for the plants, take over the procurement of materials and components, and also take over construction management if Fluor decides not to sign on with either or both set of plant owners, or is let go. This eventuality was not wholly without precedent, but not in recent experience. Thus, it would still be a significant hurdle.  As time continues however, the signs converge to point in that direction. We have only a week to wait until the present interim agreement for Vogtle expires to see what the next move will be.

Will Davis is a member of the Board of Directors for the N/S Savannah Association, Inc. He is a consultant to the Global America Business Institute, a contributing author for Fuel Cycle Week, and he writes his own popular blog Atomic Power Review. Davis is also a consultant and writer for the American Nuclear Society, and serves on the ANS Communications Committee and the Book Publishing Committee. He is a former U.S. Navy reactor operator and served on SSBN-641, USS Simon Bolivar.