Westinghouse agrees to extend assessment period for US NPPs

8 May 2017

US power company Georgia Power, a subsidiary of Southern Nuclear, which is building two new Westinghouse Electric Company AP1000 units at the Vogtle NPP in Georgia has extended an “interim assessment” agreement with Westinghouse after it filed for bankruptcy in March.

This will allow work to continue until 12 May 2017, the company said in a statement on 28 April, the day the interim agreement had been due to expire. “During this time, the parties will try to finalise a new service agreement which would, if necessary, assure that Westinghouse continues to provide design, engineering and procurement services to Southern Nuclear as a part of their assumption of control over construction management."

Scana, the owner of the VC Summer NPP in South Carolina, where two Westinghouse AP1000 units are also under construction, announced a similar extension, which will allow work to continue at the Summer AP1000 construction site until 26 June.  Westinghouse, the US-based nuclear unit of Japan’s Toshiba, filed for bankruptcy protection in the US in March. Toshiba said in February 2017 that it expects to book a loss of about $6.2bn from Westinghouse in the third quarter of fiscal year 2016. The expected write-down was caused largely by an overestimation of projects at CB&I Stone & Webster, a US nuclear construction company bought by Westinghouse in January 2016. Both the Summer and Vogtle plants have been subject to cost overruns and delays relating to the construction of the AP1000s. Construction began at Vogtle 3 and Summer 2 in March 2013 and at Vogtle 4 and Summer 3 the following November. Vogtle 3 is currently expected to enter commercial operation in late 2019, with the other units following in 2020.

The Vogtle project is majority owned by Georgia Power (45.7%), with co-owners Oglethorpe Power (30%), MEAG Power (22.7%) and Dalton city (1.6%). The units will be operated by Southern Nuclear Operating Company. Georgia Power said it would continue work to complete its full-scale schedule and cost-to-complete analysis and actively work with the Georgia Public Service Commission and the plant's co-owners to determine the best path forward for its customers. Georgia Power said the company will “continue to take every action available to hold Westinghouse and Toshiba accountable for their financial responsibilities under the engineering, procurement and construction agreement and the parent guarantee".

The interim agreement between Summer's co-owners, Scana Corporation and Santee Cooper, and Westinghouse was extended, subject to bankruptcy procedures. Scana owns the project to build two AP1000s through its principal subsidiary, South Carolina Electric & Gas Company. During this period, Fluor will continue as current role as construction manager at site. The co-owners will continue to make weekly payments for work performed during the interim period.

"The agreement extension allows the co-owners additional time to maintain all of their options by continuing construction on the project, while examining all of the relevant information for a thorough and accurate assessment to determine the most prudent path forward. The goal is to reach a decision that would balance the needs of its customers and stakeholders," Scana said.

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