$560 Million in Cost Overruns at South Carolina Nuclear Project – News Release from NC WARN
- May 17th, 2012
New SCE&G filing shows additional problems ahead with foundation, while problems at module fabrication facility still unsolved after two years
Statement by NC WARN director Jim Warren:
Durham, NC – The second new nuclear power project underway in the U.S. has suffered at least $560 million in construction cost overruns according to a report filed today by plant owner SC Electric & Gas. The report also shows that senior managers from several corporate partners are still trying “to determine a path forward” to correct widespread problems first identified two years ago at the Louisiana facility making parts for the Westinghouse AP1000 reactors that are intended for the Summer plant in South Carolina and Georgia’s Plant Vogtle.
Today’s filing with state regulators and the Securities and Exchange Commission indicates new cost overruns of over $300 million in current dollars; SCE&G reported only its 55 percent ownership share of the project, and reflected 2007 dollars. The company had earlier reported overages that equal about $262 million project-wide (in current dollars).
SCE&G seems determined to out-spend Georgia’s Vogtle project, where last week owner Southern Company reported a $900 million cost overrun along with stark language about additional problems “expected to arise throughout the construction.” Vogtle received a construction license in February; Summer did on March 30th.
Similarly, SCE&G’s report contains multiple references to a rocky road ahead. The SCANA-owned utility reports a set of foundation problems different from those that have idled dozens of workers at Vogtle, along with uncertainty about how and when they will be resolved. Just yesterday, problems with the forming of foundational steel were newly reported by maker Shaw, which will impact both Vogtle and Summer, although it’s not reflected in the new cost numbers.
But perhaps even greater problems stem from two main areas:
- At the Louisiana plant making components for both projects, widespread problems were first reported more than two years ago and led to work stoppages, but owner Shaw and reactor-maker Westinghouse have repeatedly failed to correct them. Even now, the SCE&G report reflects how corporate execs are head-scratching to fix problems and catch up for delays – even after components have been shipped to both projects. If they have already been installed, the parts might have to be torn out. More delays.
- The SCE&G report shows that design and engineering work for the Summer site is less than half complete – a process that has gone in reverse during the past year due to “site specific design work that was added to the project” during that time.
So the much-sought goal of avoiding design changes during construction has devolved into the same process that led to 90-plus reactor abandonments and billions in cost overruns a generation ago.
Meanwhile, a big question is how many of the 32 license amendments planned at Vogtle will also be required at Summer. Every one of them is likely to add to costs; contractors and vendors don’t do change-orders on the cheap.
SCE&G reports that the Summer project is saving money on financing due to record low interest rates, but the construction and manufacturing problems are a signal that crippling delays and work stoppages could be around the corner.