Cost Overruns Hit another Nuclear Construction Project – This one in South Carolina, Press Release by NC WARN
- February 21st, 2012
Corporations quarrel over $380 million as delays, design changes mount; Fukushima changes will come later and at customers’ expense
Durham, NC – A second U.S. nuclear power construction project is expected to receive a license within weeks, but a new document shows that the majority owner and contractors are arguing over who should pay the extra costs of at least 11 changes totaling over $380 million for two Westinghouse AP1000 reactors. Extra charges at the V.C. Summer project in South Carolina include “unanticipated rock conditions” for the nuclear island’s foundation, design modifications for the shield building and structural modules, and persistent problems at a Louisiana facility where plant components are being fabricated.
The delays and cost problems led primary contractor Westinghouse/Shaw to perform a “Delay Impact Study” to “assess strategies for mitigating the delay,” while a timetable for resolving the scheduling problems, along with an updated cost estimate, might not be completed for months, according to a report by South Carolina Electric & Gas to state regulators last week. SCE&G owns 55 percent of the project, and its share of the cost overruns could reach $188 million in 2007 dollars. The position of minority owner SCANA, an electric cooperative, regarding the overruns is not clear.
Out of 146 construction milestones, 42 have been delayed for up to 13 months so far, according to the report. At the Louisiana fabrication plant, Shaw “has been working since 2010 to correct and recover from [Quality Assurance & Control] issues and other issues related to module fabrication at its facility in Lake Charles.” … “One of the largest modules to be fabricated and [installed] early in the construction process” has been delayed by 11 months.
“South Carolina electric customers have joined those in Georgia and Tennessee in holding the bag for escalating costs of nuclear construction projects gone awry in their infancy,” said NC WARN’s Jim Warren today. “Summer and Vogtle each hit major overruns even before gaining a construction license, and are sure to suffer more escalations for two reasons: dead-certain changes required by the Fukushima tragedy, and the combination of inherent complexities and experimental nature of the AP1000.”
The Tennessee mention refers to a construction project mothballed for decades and now suffering severe construction delays and millions in cost overruns during its attempted resuscitation by TVA, a federally owned electric utility.
Today’s news adds fuel to a lawsuit filed last week by public interest groups challenging the U.S. Nuclear Regulatory Commission’s approval of the AP1000 plant design because the agency has not required owners to incorporate widely-expected changes, based on last year’s crippling disaster in Japan, as strictly required by federal law prior to licensing. Such design changes will boost the price tags of AP1000 projects, and could include major alterations such as upgraded protections against earthquakes based on new information about seismic activity in the eastern U.S., and consideration of accidents on sites with multiple reactors.
In its quarterly report to state regulators, SCE&G wrote of the Fukushima changes, “New plants will fall under these same requirements once a license is issued.” But the utility has not estimated the cost of the changes in official filings.
The lawsuit against the NRC also seeks to stop construction of two AP1000 units at Southern Company’s Vogtle site. The groups point out that an independent nuclear industry engineer serving as construction monitor has warned that the problems at Vogtle go much deeper than Southern has admitted, that many have persisted despite repeated attempts at resolution, and that various parties are already arguing about responsibility for the many changes.
The monitor, Dr. William Jacobs, reported in December that Southern Company “continues to face significant challenges in maintaining the Project forecast at or below the certified amount.”
One particular warning by the construction monitor – that efforts at Vogtle to recoup lost time could compound existing problems – rings ominously for the Summer project too: Catch-up efforts “could result in, among other risks, significant additional cost to staff extra shifts of construction, support and oversight personnel, inefficiencies due to working additional shifts with lower productivity, congestion and unplanned overlap of construction activities, additional rework, and additional regulatory oversight due to increased Quality Assurance issues.”
The extent of overlap between the Summer and Vogtle lists of cost overruns is not clear because information is being cloaked as business secrets.
“The sky’s the limit with these projects,” Warren added. “State ratepayers and federal taxpayers are already suffering rate increases, while scores of contractors and suppliers gobble up the gravy train from myriad construction changes – just like in the 1980s. The only reason these projects haven’t been abandoned – yet – is because the public has been forced to absorb uncontrolled rate hikes to pay for them.”
V. C. Summer Nuclear Station Units 2 & 3: Quarterly Report to the South Carolina Office of Regulatory Staff Submitted by South Carolina Electric & Gas Company: