Vogtle deadline looms, utilities consider natural gas conversion

By Thomas Gardiner, The Augusta Chronicle

Construction on new American commercial nuclear power generation plants will reach a milestone Friday, marking 30 days since Westinghouse filed for bankruptcy protection.

Westinghouse was contracted to construct four new nuclear reactors, two at Vogtle near Waynesboro and two at VC Summer near Jenkinsville, S.C. According to bankruptcy filings, cost overruns at the facilities left Westinghouse, a subsidiary of Toshiba Corp., with a deficit it couldn’t overcome.

The filings on March 29 were not unexpected and started a 30-day interim period where Southern Company and SCANA, the states’ two respective plant operators, began paying out of pocket for construction to continue. One Georgia Public Service Commissioner has taken some matters into his own hands, while the Nuclear Regulatory Commission held an open house Thursday to discuss construction inspections. According to NRC spokesman Roger Hannah, construction progress at Plant Vogtle has met expectations.

“We look at a sample of whatever they are doing, whether its pouring concrete or new wiring, we make sure the contractors are doing what they’re supposed to be doing,” Hannah said.

In the wake of the bankruptcy, it is unclear how Southern Company will proceed once the interim period expires. That period expires Friday , and can be extended up to 90 days total. No announcement has been made in either state about whether or not an extension has been granted.

During a hearing earlier in the month, SCANA representatives told the South Carolina Public Service Commission 30 days was not enough time to finish analysis and they expected to extend the interim period. The Georgia Public Service Commission has not made an extension public, nor has Southern Company.

Tim Echols, PSC Vice-chairman, hand delivered a letter last week to Secretary of Energy Rick Perry, saying the opportunity to deliver a message to the federal government regarding the seriousness of Georgia’s situation couldn’t be passed up.

“In terms of the possibility of a federal bailout, I recall the reaction when taxpayers had to bailout the auto industry at the start of the Great Recession,” said Liz Coyle, Executive Director of Georgia Watch. “I don’t think we’re there yet.”

The possibility of federal assistance was a topic in a recent SCANA earnings teleconference, in which COO Steve Byrne outlined three avenues for federal help. According to Coyle, Byrne said assistance could be written into the pending Fiscal Year 2017 appropriations bill, it could be added to the comprehensive tax reform bill, or it could be introduced as an independent bill.

Georgia residents have individually dished out as much as $500 for the Vogtle project since the PSC allowed Southern Company to collect from ratepayers to fund the Vogtle expansion, before any power was supplied by the two new reactors. The reactors were originally expected to be online this year, but both AP1000 reactors are still awaiting installation.

Hannah said Southern Company has done its part.

“Southern Company did everything according to regulations,” he said. “They are the ones ultimately responsible for the project. If we find something wrong, we let them know and they have to correct the problem. What the NRC is concerned with is that the construction happens according to regulations. Southern Company provided us with everything we asked of them.”

Southern Company’s actions, however, couldn’t save Westinghouse, and potentially parent company Toshiba.

“I think the prudency review stipulation we approved in December does protect our ratepayers,” Echols said. “Toshiba has parental guarantee for this project that would be voided if they went bankrupt. I thought it was prudent to make sure that Secretary Perry was aware that without the guarantee, our costs could drastically escalate.”

Echols said a number of options will be considered when Southern Company brings its analysis to the table. He said several crucial financial elements will be under consideration, including the potential cost to convert the expansion units to natural gas generators.

“I can’t speak for the other commissioners, but Georgia Power will be giving us a cost to complete the plant as well as a cost for other options including the cost to convert,” he said.

Jacob Hawkins, spokesperson for Southern Company, said, “As with all costs incurred during the project, they will be reviewed and evaluated. This continues to be an evolving situation and we are keeping the PSC informed every step of the way. We will continue to take every action available to us to hold Westinghouse and Toshiba for their financial responsibilities.”

An announcement regarding the interim period extension is expected later Friday.

Source: The Augusta Chronicle