nuclear-news

Westinghouse cagey about paying more for delays in new nuclear power

Will Westinghouse pay for another nuclear delay? Power Source, February 10, 2015 A strange argument went down on Dec. 16 among electric utility Georgia Power and its regulator, the Georgia Public Service Commission, and entangled local nuclear firm Westinghouse Electric Co.

Cranberry-based Westinghouse and its partners in the construction of the first two AP1000 reactors in the United States had, up to that point, resisted telling Georgia Power when the project would be completed. The company provided a list of activities planned through December 2015, but would not forecast further, Georgia Power told the commission.

The utility tried time and again to obtain an integrated project schedule, it told regulators. Already, the project originally set to be completed by April 2016 was 21 months behind.

The regulators, in turn, wondered who’s running the show — the utility that hired the consortium of nuclear builders for an estimated $14 billion project or its contractors.

When Westinghouse and its main construction partner, Chicago Bridge & Iron, finally submitted the long sought-after document in January, they revealed another 18-month delay, projecting the first plant would be ready for service in mid-2019 and the second in 2020.

Georgia Power has placed the estimated cost of the delay at $720 million, or $40 million a month. That’s on top of more than $1 billion in delay- and design-related costs that the two sides have been suing each other over since 2012.

The utility hasn’t agreed to the new dates, its parent company, Atlanta-based Southern Co. said in a public filing Jan. 29. Nor does it believe that Westinghouse and its partners have done everything possible to mitigate the delay. And, as has been the pattern with cost overruns in the project, Southern Co. told investors it expects the latest expenses to become part of the lawsuit.

The company’s CEO Tom Fanning said on Bloomberg Television last week, “Southern Co. won’t absorb those costs. The contractors will.”

Chicago Bridge & Iron has denied that claim. Westinghouse declined to address the comment………..

The likelihood of delays is so ingrained in nuclear construction that the Public Service Commission requires its analysts to continuously update the cost of potential delays spanning as many as four years.

Deviating from original construction schedules and budgets has been the norm for all past nuclear construction projects in this country, one of the main criticisms of undertaking such efforts.

As a result, a lot is seen as riding on the Vogtle construction. With cheap natural gas flooding U.S. markets, nuclear has to prove there’s an economic advantage to investing in such capital-heavy construction instead of throwing up a couple of natural gas power plants in a few years’ time at a fraction of the cost……..http://powersource.post-gazette.com/powersource/companies-powersource/2015/02/10/Will-Westinghouse-pay-for-another-nuclear-delay/stories/201502100014

February 11, 2015 - Posted by Christina Macpherson | business and costs, USA