Construction progress on the troubled Plant Vogtle nuclear project appears to be improving since Southern Company and Georgia Power began picking up the pieces after a key contractor’s recent bankruptcy, state regulators said.
“I’ve never seen so many bodies at work,” said Steven Roetger, an analyst in charge of monitoring the project for the Georgia utility regulator’s public interest advocacy staff. “There certainly seems to be more activity.”
But the bar was pretty low: the Georgia Public Service Commission’s staff said at a hearing Thursday that key parts to the project fell almost another year behind schedule last year.
“These critical areas (of the project) slipped almost day for day” during the past year, said Roetger.
Thursday’s hearing was part of the PSC’s semi-annual examination of Georgia Power’s spending and progress toward building two new nuclear reactors at Plant Vogtle, near Augusta. The company is seeking the utility regulator’s approval of $222 million spent during the second half of 2016.
But much of the hearing was spent looking at the Plant Vogtle expansion’s problems leading up to Westinghouse Electric’s bankruptcy filing in late March. Westinghouse cited losses at Vogtle and a similar project in South Carolina for its Chapter 11 reorganization.
That bankruptcy has thrown the Vogtle project’s viability into question. Southern Company and its largest subsidiary, Georgia Power, are expected to complete an analysis in August of future options, including continuing construction, converting the expansion to natural gas plants or shutting it down.
At Thursday’s hearing, a dozen members of the public exhorted the PSC’s five-member board to pull the plug.
Westinghouse’s bankruptcy was a “divine intervention” to allow the PSC to consider shutting the project down, said Minnie Ruffin, wearing a black “Atlanta Grandmothers for Peace” t-shirt. Vogtle “was a mistake from the beginning,” she said.
The Plant Vogtle expansion is already at least $3 billion over budget and well over three years behind schedule. Disruptions from the Westinghouse bankruptcy are expected to add more costs and delays.
On Wednesday, Georgia Power said it had extended a temporary contract with Westinghouse to continue work on the project until July 20. Westinghouse has said it plans to ditch its old Vogtle contract as part of its bankruptcy reorganization.
Georgia Power and Southern Nuclear, Southern’s nuclear arm, said they expect to take over formal management of the project in late July under a recently completed new agreement in which Westinghouse will continue to provide engineering and other support.
The company also said it expects to receive a $300 million payment in October from Toshiba Corp, Westinghouse’s parent company, as the first installment toward making good on almost $3.7 billion in earlier financial guarantees it promised on the Vogtle project.
Construction of the two reactors is now 32 percent complete, said William Jacobs Jr., the PSC’s independent construction monitor.
He and Roetger said many of the cost overruns that pushed Westinghouse into bankruptcy probably could have been avoided if the company had updated a complete plan for managing, supplying and staffing the complex project, which involves more than 200,000 tasks to be completed in a specific order.
In another huge oversight, according to the project monitors, Vogtle’s contractors apparently didn’t prepare an estimate of how much it would cost to complete the project until late last year.
The monitors testified that Georgia Power wasn’t responsible for those missing plans and estimates, but should have made sure they were done and updated as the project was built.
“One hundred percent of CEOs” would have wanted to know ahead of time if a massive loss was going to strike the company five years down the road, said Roetger. Those documents would have helped detect looming problems “much earlier,” he said.
As it was, the lack of solid information on progress at Vogtle “does raise a question of reasonableness,” he said. “We simply didn’t believe their forecasts or schedule.”
Jacobs and Roetger said a complete update of that project management plan hasn’t been done yet. Southern and Georgia Power expect to finish an update next month, they said.
“For us it would be like Christmas in July,” said Roetger.
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