Future of US AP1000s still unclear

10 May 2017

The project to build two Westinghouse AP1000 reactors at the US Summer NPP is over 64% complete, Scana subsidiary South Carolina Electricity & Gas (SCG&E) said in a progress report to the state’s Public Service Commission (PSC) on 8 May. The estimated completion dates for the two Generation III units remain unchanged, but will be re-evaluated in light of Westinghouse's bankruptcy filing in March.

The progress report said that, as of 31 March 2017, the project’s engineering phase was 96% complete, with procurement 88.2% complete, construction 34.3% complete and startup activities 8.6% complete. These figures were weighted and aggregated to give a total percentage completion of 64.1%.  During the last quarter, the last of the project's four steam generators and two of unit 2's four reactor coolant pumps (RCPs) were received on site. The remaining RCPs for unit 2 are completed and awaiting shipment, while the RCPs for unit 3 are undergoing final assembly and testing.

SCE&G told the PSC it is still evaluating whether or not to complete one or both of the units following Westinghouse’s bankruptcy filing. The company expects to complete its evaluation during the second quarter of this year. SCG&E has not yet validated Westinghouse’s revised estimate that it will cost about $829m more to complete the units than Westinghouse will be entitled to charge under the engineering, procurement and construction (EPC) contract for the project.

Damages that could be claimed under the EPC contract are capped at a level of 25% of payments already made at the time that a breach of contract occurs. "The cap currently stands at approximately $940 million, which exceeds the amount of additional cost reflected in [Westinghouse's] unvalidated estimate," the company said. Westinghouse's payment obligations under the EPC contract are guaranteed directly by its parent company, Toshiba.

Similar problems face Southern Company, which is building two Westinghouse AP1000s at its Vogtle NPP. Southern has asked Toshiba for the $3.7bn it owes the company to complete the construction of the Vogtle plant. According to an interview with the Wall Street Journal, Thomas Fanning, Southern Company’s chair and CEO, said that the utility is working with Toshiba to get the $3.7bn   but even if Toshiba honours this commitment, it is unclear whether the plant will be completed. Fanning believes the company will reach an agreement with Toshiba in the next few weeks. However, Toshiba is planning to exit the overseas nuclear construction segment, and construction at Vogtle is three years behind schedule with cost overruns exceeding the original budget by $1.3bn.



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