Electric customers beware – construction problems mount even before design approval and licensing
Durham, NC – Georgia’s state monitor of construction at the Vogtle nuclear plant filed testimony Friday that is replete with references to problems likely to cause more delays and cost overruns with the taxpayer-backed, $14 billion project. Despite the lack of design approval or a construction license, extensive pre-construction has already led to 12 sizeable construction “change order” requests, while long-running site-specific design and fabrication problems have confounded Westinghouse and its lead contractor for more than two years, according to the state monitor.
Georgia Power’s customers are sitting ducks for serial cost overruns and soaring power bills unless industry-captive federal and state regulators borrow some independence and make these giant corporations bear the costs of their mistakes with Westinghouse’s AP1000.
Last month Georgia Power said the project is facing a five-month delay because of problems with design approval and licensing by the U.S. Nuclear Regulatory Commission. But last Friday the construction monitor, Dr. William Jacobs – a veteran nuclear industry engineer – indicated the problems go much deeper, that many of them have persisted despite repeated attempts at resolution, and that various parties are already squabbling over who pays for the many changes. Much of his testimony was censored by Georgia Power in the attempt to keep cost information from the public.
On top of the problems Jacobs identifies, the NRC is ignoring multiple design problems raised by inside and independent experts. And in defiance of federal law, the agency plans to allow extensive Fukushima-related design changes to be attempted during construction of the AP1000, with Georgia ratepayers set to pick up the cost overruns.
VERBATIM EXCERPTS FROM THE CONSTRUCTION MONITOR’S REPORT (emphases added):
Q. PLEASE DESCRIBE THE PROJECT’S CURRENT STATUS?
… construction activities at the site are generally progressing well. However, as described in more detail later in this testimony, the Project faces significant challenges in achieving commercial operation of Unit 3 in April 2016 and of completing the project within the certified cost. … In addition, many of the issues and concerns that were identified and discussed in the Second, Third and Fourth Semi-annual VCM proceeding have not been resolved at this time. These issues include:
– Design and fabrication of modules and sub-modules at the Shaw Modular Solutions (“SMS”) facility as required to meet the Project schedule;
– Production of Vogtle specific Certified For Construction (“CFC”) design packages as required to meet the Project schedule.
While progress has been made in these areas during the last six months, the Consortium has not yet demonstrated the ability to produce complete modules and CFC design packages as needed to support the Project schedule.
Q. WHAT IS YOUR OPINION REGARDING SCHEDULE COMPRESSION?
While it is possible that some of the current delay can be recovered through schedule compression, I pointed out in my prior testimony that the Consortium has failed to meet many of the schedule milestones to date and this trend has continued. Current critical activities such as xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx [REDACTED]. Given the Consortium’s continued inability to meet scheduled milestones to date leads me to question the Consortium’s ability to complete a significant portion of the schedule faster than originally planned.
Q. PLEASE DESCRIBE THE POSSIBLE BENEFITS AND RISKS OF SCHEDULE COMPRESSION IN MORE DETAIL.
… Given the first time nature of the Vogtle 3 and 4 Project, a significantly compressed schedule 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 QA [Quality Assurance] issues.
Q. DOES THE COMPANY FACE SIGNIFICANT CHALLENGES IN MAINTAINING THE BUDGET FORECAST AT OR BELOW THE CERTIFIED AMOUNT?
Yes, as I discussed in my testimony in the 3rd and 4th VCM proceeding, the Company continues to face significant challenges in maintaining the Project forecast at or below the certified amount. A possible schedule delay as discussed above would impact the financing cost of the Project. In addition, the Company’s forecast does not include many potential change orders that could significantly impact the direct construction cost of the Project. [See the list of twelve change order requests beginning on page 12.]
Q. HAS THE COMPANY MADE PROGRESS SINCE THE 4TH VCM PERIOD TO RESOLVE THESE POTENTIAL CHANGE NOTICES?
The Company has made little progress in resolving the potential changes in the six months since my last testimony.
Q. WHY IS IT IMPORTANT THAT THESE ISSUES BE RESOLVED?
Some of these potential change orders could have a significant impact on the Project cost. The forecast cost provided in the Company’s testimony does not include the possible cost impact of these potential change notices. Until the magnitude of the costs associated with these potential change orders and the responsibility for these costs is known, the forecast cost for the Project is uncertain.
… The cause for Project delays, the responsibility for the delays and the cost of the delays need to be resolved before all parties can agree on a schedule.
Q. PLEASE PROVIDE AN UPDATE TO THE COMMISSION ON THE ISSUES RELATED TO QUALITY ASSURANCE, DESIGN AND FABRICATION OF MODULES AND SUBMODULES AT THE SHAW MODULAR SOLUTIONS FACILITY.
… the ability of SMS to provide complete high quality modules to meet the Project schedule remains a significant concern.
Q. PLEASE DESCRIBE THE ISSUE RELATED TO DESIGN FINALIZATION.
Finalization of the detailed Vogtle specific AP1000 design culminating in issuance of Certified For Construction (CFC) design packages for the Project remains a concern.
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