Vogtle cost/schedule issues reiterated at PSC hearing

Construction site of two new Vogtle reactors. Georgia Power claims they're 56% finished. This photo, taken March 20, 2014, suggests they're not nearly that far along....

Construction site of two new Vogtle reactors. Georgia Power claims they’re 56% finished. This photo, taken March 20, 2014, suggests they’re not nearly that far along….

Just over a week ago we reported that all five reactors now under construction in the U.S. are experiencing delays and cost overruns.  At a hearing Tuesday before the Georgia Public Service Commission on construction of Southern Company’s two Vogtle reactors, the Commission’s own experts “reiterated concerns about struggles for the project south of Augusta. Georgia Power customers are already paying for financing of the expansion on their monthly power bills and one expert has said any additional delay could cost the company $2 million a day. Those costs could be picked up by ratepayers.”

The big news of the day–and news that indicates further delays are likely–was that Southern Company’s Georgia Power division has switched suppliers for some of the very large components of the reactors. The company had chosen a modular approach for construction, which it had hoped would result in lower costs and speedier construction. But the company it chose, CB&I, has been both behind schedule and unable to meet quality control standards.

As the Associated Press reported:

“A factory owned by CB&I in Lake Charles, Louisiana, was producing large structural modules, some weighting tens of tons, that could be picked up by a crane and hoisted into place. The technique was supposed to be faster and cheaper than building a plant part-by-part at the construction site.

“However, the CB&I facility has struggled to produce the modules while meeting the detailed quality control rules required for the nuclear industry. Jacobs [William Jacobs, a nuclear engineer hired by the PSC] wrote in a recent report that the factory was ‘not prepared for the rigor of nuclear construction.’

“‘Certainly there have been problems at Lake Charles getting the modules, so I guess it’s not totally surprising that the consortium would go ahead and look around,’ Jacobs said during a hearing at Georgia’s Public Service Commission. CB&I spokeswoman Gentry Brann declined to comment, referring questions back to Georgia Power.”

Switching giant manufacturing facilities in the middle of a project is not likely to speed things up–the new companies have to gear up to be able to produce components that large, and there is no guarantee they’ll do any better of a job than CB&I. The issue may be the first-of-a-kind modular approach Georgia Power adopted is more difficult to accomplish than the utility believed. Not that manufacturing incompetence can be simply dismissed as a cause of the problems…

But don’t expect the Georgia PSC to actually step in and do anything about the escalating costs and schedule delays, at least not while there are PSC Commissioners like Lauren W. “Bubba” McDonald, Jr. in office. Yes, “Bubba.”

Bubba told the Kiwanis Club of Gainesville, Georgia recently that he’s all for nuclear power and the Vogtle reactors, “It’s going to be the saving grace for Georgia,” McDonald said. “It’s clean, it’s safe and it’s cheap.”

That “cheap” part looks like it’s going to come back and bite Bubba in the you-know-where. But until then, Georgia ratepayers, under the state’s antiquated law that forces them to pay for the reactors in advance–whether or not they ever generate any electricity at all, much less affordable electricity–will be the ones who suffer.

In last week’s article cited above, we noted a study filed by the project’s construction monitors casting doubt on Georgia Power’s cost and schedule estimates, but we did not have a link for it. It can be found here.

Michael Mariotte

July 3, 2014

Permalink: https://safeenergy.org/2014/07/03/vogtle-costschedule-issues/

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10 thoughts on “Vogtle cost/schedule issues reiterated at PSC hearing

      1. Peter Sipp

        I lived in Ga during the first two reactor builds. The local media has brain washed the surrounding area so completely that reality does not exist. That is mostly why the rate payers are silent. Course I know that the small area surrounding the reactors is not the whole state of Ga. However comma the tentacles of that same media reach all the way to Atlanta & the Ga. PSC. The MIGHTY group G.A.N. E. ( Georgians against nuclear energy ) is in Atlanta. Then there is S.A.C.E. ( Southern Alliance for Clean Energy) in Savannah Ga. These two groups need to be funded to counter the cheerleaders and end the building of the reactors. I don’t know either one’s web address.

  1. Rod Adams (@Atomicrod)

    @Michael

    Though the AP report had a negative slant on the recent testimony from the independent construction monitor, other reporters came away with a different interpretation of what he said. For example, Walter Jones of the Morris News Service filed a report that was published by Online Athens titled “Vogtle monitor gives PSC positive report.”

    You can find it here – http://onlineathens.com/local-news/2014-06-23/vogtle-monitor-gives-psc-positive-report

    That report recognized that the project started slowly, which is not surprising considering the length of time that the nuclear construction industry was dormant in the US. Here are some comments indicating that the project has picked up speed as the team learns.

    “Some glitches encountered in the early phases constructing Unit 3 haven’t been repeated as Unit 4 has begun. Jacobs said that “indicates the project is taking advantage of lessons learned from Unit 3 design and construction. Staff believes the ability of the project to internalize and adopt lessons learned could be a key positive for the project going forward.”
    He also notes that the builders have made significant accomplishments on the non-nuclear part of the expansion, such as the Unit 3 cooling tower, offices and warehouses.”

    It is also not terribly surprising that the project will not be delivered on its originally scheduled completion date. After all, the NRC was thoroughly distracted during 2011 and would not prioritize new construction licensing.

    I wrote several articles in 2011 about the effect of NRC distractions on the schedules and costs of new reactors. Here’s an example:

    http://atomicinsights.com/nrc-lack-of-planning-may-increase-delays-for-new-reactor-licenses/

    The Georgia PSC commissioners are right to be “concerned” and to keep close tabs on the project. However, it is a disservice to imply that delays are adding up; there was a delay in starting the project that will most likely never be made up because there is no way to rush high quality construction work.

    However, the plants will be completed on a reasonable schedule at an acceptable cost that will make future generations happy that some far sighted people recognized the need and chose the right technology to supply affordable, reliable, emission free electricity.

    Rod Adams
    Publisher, Atomic Insights

    PS – Disclosure. The man who is currently the Director of Site Operations at Vogtle 3&4 helped me learn how to operate and maintain nuclear power plants. Later in my career, he was the Squadron Engineer when I was an Engineer Officer. I have personal knowledge and deep respect for his technical skills, management competence and leadership ability.

    Reply
    1. Michael Mariotte Post author

      I actually think the AP report was pretty fair and even-handed. You can overlook Vogtle’s problems if you want, or blame them all on the NRC, but it certainly wasn’t the NRC that told Southern to hire CB&I. That mistake is going to lead to more delay. Maybe some lessons have been learned, but the nuclear industry historically has not been very good at that–that’s why the first 75 reactors built in the U.S. averaged 207% over budget–and the latter ones were even more overbudget. I believe Vogtle will continue to experience schedule slippage and cost overruns, and in the end will make no one happy, especially not the ratepayers who will be forced to pay for this boondoggle. We’ll see who’s right in a few years…..

      Reply
      1. Rod Adams (@Atomicrod)

        @Michael Mariotte

        The problem with looking at averages is that you often miss the excellent performers because of the way that bad performers have a larger effect on measures like schedule performance and cost compared to initial budget.

        A terrific construction performance MIGHT result in a project that is a few days, or, at most, a month or two earlier than planned. It MIGHT come in at a cost that is a few percent below budget.

        If you have a sample with 100 projects and 75% of them (which, admittedly, is unlikely) meet their budget and schedule with a few being exceptionally good, the average performance becomes rather dismal when you add in 25 projects that have real issues or artificially imposed delays – like several year long licensing moratoria, interest rate shocks that lead to 20% prime lending rates, and inflation shocks that lead to price doubling times less than half a dozen years.

        There were a number of early reactors that came in essentially on time and on budget. Shippingport was a 4 year project from funding to finish. Duke Energy, for example, earned the respect of the entire industry with its ability to perform.

        Interestingly enough, Westinghouse did not “hire” CB&I. It formed a partnership with the Shaw Group after Shaw came up with enough capital to purchase 20% of Westinghouse from Toshiba. That capital injection came with an agreement to use Shaw as the EPC contractor for the first few units built.

        Shaw later sold its interest and then sold itself to CB&I. Performance has improved, mainly because CB&I is a more experienced company. It is easy to criticize the nascent nuclear construction industry in the US, but it is faced with rebuilding after a very lengthy hiatus of more than 30 years between new project starts.

        I expect that Vogtle and Summer will be close enough to on time and on budget to encourage additional AP1000 projects and additional technology development. There are many entrepreneurial companies out there who have studied hard and learned many lessons from the first Atomic Age.

        It’s a good thing for the world because we need all of the emission free power we can find in order to break the industrial economy’s near complete dependence on hydrocarbon combustion.

        Rod Adams
        Publisher, Atomic Insights

      2. Michael Mariotte Post author

        By focusing on the very few reactors that came in close to on time and on budget, you miss the overall picture of the nuclear industry–which failed dismally at both overall during the first generation of construction. In this case, the averages told the story better than the few who beat the average. Given current industry experience in the West–eg Finland and France, and so far at least in Georgia and to a lesser extent South Carolina–the past appears that it will be prologue.

    2. Peter Sipp

      Rod, you say future generations will be happy that some far sighted people chose affordable, reliable, emission free nuclear????? You are taking lipstick – covering a whole pig with it saying,” This lipstick, is affordable, reliable and leaves no emissions.” Never mind what the lipstick is (trying to cover up).
      Atomic energy will be affordable, reliable and emission free as soon as the Sun starts rising in the West.

      Reply
      1. Rod Adams (@Atomicrod)

        @Peter Sipp

        If you would take off your blinders, you would recognize that there are many places in the world where atomic energy is already affordable, reliable, and emission free. Sweden, Switzerland, South Korea, France, China, Taiwan, the US Southeast, Belgium, and Spain all have programs that qualify for those adjectives.

      2. Michael Mariotte Post author

        There is no such thing as an “emission free” reactor. All reactors emit toxic radiation on a routine basis. Reactors may not cause carbon dioxide emissions (although that is not the case for the rest of the nuclear fuel chain), but it is incorrect to call them “emissions-free.” And remember, while carbon is of course a critical pollutant, it is not the only one in the world. That’s why we support a nuclear-free, carbon-free energy system.

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