Is Georgia's Project the Nuclear Revival's Last Gasp?
The construction, engineering and fabrication issues raised by Christopher Hartz and detailed here by ENR applied to both the Plant Vogtle and V.C. Summer nuclear expansion projects. Currently, though, those projects are facing very different political environments.
In South Carolina, a political firestorm continues to surround the cancellation of the V.C. Summer expansion by project co-owners South Carolina Electric & Gas (SCE&G) and Santee Cooper. On Oct. 28, for example, SCANA Corp.—the parent of SCE&G—was adamantly denying a report that the utility had “ousted” chief executive Kevin Marsh and COO Stephen Byrne as a result of the bungled project.
“No senior executives were terminated, nor did any resign or retire,” a SCANA spokesman told ENR.
That was just the latest dustup. Politicians are continuing to hold hearings in Columbia about the bungled job and its impact on ratepayers, and the Charleston Post & Courier has reported that SCANA is in “preliminary talks” with the state about how much ratepayers will be forced to pay.
The impact on ratepayers was a primary factor in Santee Cooper’s decision to cancel the project, since roughly 18% of customers’ monthly bills go toward the nuclear expansion’s costs. As Santee Cooper spokeswoman Mollie Gore told ENR at the time it canceled the project: “We would have to raise rates an additional 41% to complete both units and 37% to finish just one unit.”
Meanwhile, in Georgia, an unusually long three-day stretch of hearings before the Public Service Commission is expected to result in the state body approving Georgia Power’s request to continue moving forward with construction. Usually limited to a single day, the PSC has extended the latest round of hearings to give time to first-time “intervenors,” including the Nuclear Energy Institute, North America’s Building Trades Union and other construction-related groups likely to argue in favor of the state permitting the project to proceed.
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In late August, when Georgia Power issued its recommendation to continue construction, it also announced it was replacing Fluor Corp., its previous contractor, with Bechtel Corp. The utility also updated the planned commercial operation dates for the new units, extending them each by 29 months, to November 2021 for Unit 3 and to November 2022 for Unit 4. Those new dates are five years beyond the project’s original commercial operation dates of 2016 and 2017 for Units 3 and 4, respectively.
At that time, Georgia Power reported its new estimate of $9.45 billion to complete the project, pushing the two-reactor project’s total to roughly $19 billion. That date was based largely upon a cost and schedule assessment provided by Bechtel.
At the time, Steve Kuczynski, CEO of Southern Nuclear, told ENR the company was increasingly confident that Bechtel’s takeover of the project would enable contractors to complete construction on this new schedule.
But Bechtel also noted several “key risks” to the cost and schedule assessment it provided. At the top of its risk list, the contractor noted: “Bechtel has not independently reviewed and validated the engineering design drawings and deliverables, which have been prepared by other entities, nor has it conducted constructibility reviews.”
The contractor also noted that it had not conducted its own estimate of materials quantities, instead relying upon information from Southern Nuclear.
“Bechtel also understands that detailed engineering is not yet complete, and therefore there is the possibility that additional quantities will be identified as necessary for construction completion as engineering progresses,” the firm’s report added.
“If the existing quantity estimates that Bechtel has been provided prove to be inaccurate, or if quantity figures change as a result of changes to existing engineering or further engineering work, that could significantly impact Bechtel’s cost and schedule assessment,” the report continued.
Because Bechtel had not independently reviewed and validated the engineering design drawings or conducted constructibility reviews, it stated that any changes in these items could result in an increase in craft labor costs.
In announcing on Sept. 29 the Dept. of Energy’s conditional approval of $3.7 billion in new federal loan guarantees for the project, Secretary of Energy Rick Perry stated, “I believe the future of nuclear energy in the United States is bright and look forward to expanding American leadership in innovative nuclear technologies.”
The Georgia PSC is expected to announce its decision to approve or cancel the project on Feb. 6, 2018.
Related Article: Witness to the Origins of a Huge Nuclear Construction Flop