Is V.C. Summer really dead or is near term revival possible?
Several leaders in the South Carolina government are actively searching for ways to revive the V. C. Summer expansion project. The project includes construction of two Westinghouse AP1000 power plants capable of producing 1,140 MWe each. That is enough new nuclear capacity to enable the state to idle or close almost all of its coal-fired generating capacity. For a variety of cost, schedule, supplier and ownership issues, the project was halted on the last day of July.
SCE&G reported that the decision was very difficult, but made necessary when Santee Cooper announced that it was unwilling to continue. Santee Cooper, a state-owned utility company that owns 45% of the expansion project, determined it could no longer expose its customers to responsibility for an unknown project cost and an unknowable completion date.
As a publicly regulated utility, SCE&G was required to file an abandonment plan with the South Carolina Public Service Commission. It needs PSC approval for its plan to stop working on the project and to recover expended costs in customer rates over a 60 year period. That plan included giving the PSC information about the treatment of compensation received from Toshiba as a result of its failure to perform certain guaranteed contract provisions.
Yesterday, SCE&G announced that it had voluntarily withdrawn the abandonment petition.
In a statement, the company said: “Over the past two weeks, SCE&G management has met with various stakeholders and members of the South Carolina General Assembly, including legislative leaders, to discuss the abandonment of the new nuclear project and to hear their concerns.” SCE&G said its decision to withdraw the abandonment petition was “in response to those concerns, and to allow for adequate time for governmental officials to conduct their reviews.”
Scana president and CEO Kevin Marsh made it clear that conditions must change before his company could revise its previous decision. The project could only move forward with a willing and capable partner, a new ownership agreement, a suitable agreement with a capable construction firm – he mentioned Fluor but left open the possibility of “someone else,” some certainty about the project being able to qualify for the nuclear production tax credit, and a new agreement with Westinghouse for design engineering services since “the plant is their design.”
Putting all of that together would take a year or more, and only after it is completed would it be possible to begin gathering the construction team required to restart the on site work.
It would not be easy, simple or cheap, but the same can be said about most worthwhile endeavors. If the U.S. is going to restore its capability to build nuclear power plants that can compete with coal and natural gas to make us less dependent on those fuels, reviving V.C. Summer could be an important step in the right direction.
I Believe in my Heart that this plant is necessary for this state for clean, low cost power. So much time and money has already been spent. It does not make sense to me in any way I think about it to abandon this project!! Thanks for reading this, Ross Allen. former Journeyman Mechanic, VC Summer.
Thank you for your heart-felt comment. I hope you continue to share your thoughts about your work and the team involved here.
The way these workers were treated is a disgraceful. There needs to be some major changes in the so called management of the utilities. Hopefully the local government will force them to rethink this poor decision. They say they abandoned the project due to concerns of cost and no time frames but what about the billions that consumers have already spent on NOTHING it’s an outrage and it looks like all those involved outside of the utility think so!!!
I have been through two plant closures. I thought each closure was a real possibility but both announcements were made somewhat sooner than we were led to believe. Once a decision is made, it is imperative that it be announced as soon as possible. The reason is not heartless cruelty but to make the information available to all stakeholders as simultaneous as possible. Otherwise, there is a potential for insider trading and other financial games.
I think SCANA has done well for it’s employees (as allowed by the circumstances). I can’t speak for how the contractors handled their employees. I am sure that the SCANA executive leaders made every possible effort to keep this project viable. The only possible criticism is that perhaps they were not an ideal candidate for this project. Perhaps SCANA could have done greater due diligence before signing the contract. Perhaps they should have been more aggressive getting accurate information out of Westinghouse ( good luck with THAT). SCANA stepped into the batter’s box while Exelon, Duke, Entergy and NextEra remained in the dugout.
I still can’t believe that Westinghouse and Santee Cooper (owned by the state of SC) are immune to criticism.
I still can’t believe that Westinghouse and Santee Cooper (owned by the state of SC) are immune to criticism.
Why do you think they are immune? Though I have not yet addressed Santee Cooper’s culpability here, I don’t think you’ll find that Westinghouse has escaped criticism in articles that you can find in the Atomic Insights category of “AP1000 saga.”
It wasn’t you specifically I was referring to. What I had in mind were those that seemed to point to the NRC as the cause of the cancellation as well as public officials and SC PSC members who now want SCANA to undergo a show trial.
Your article on the teething problems of the RCPs said more about the project than I realized at the time. Typically, technological systems that have troubled development histories tend to be troublesome in operation – similar to computer programs that have to be rewritten and debugged numerous times. One exception though thst comes to mind is the F-1 rocket engine which was plagued by combustion instability and threatened to jeopardize the Apollo project. However, in over 13 flights involving 65 engines it never failed.
It looks like there’s at least one thing missing from that “to-do” list, and that’s for the bankruptcy court or Congress to get a non-exclusive license for the AP1000 design and related technology for an all-US firm able to do the manufacturing. If Toshiba is going to stick a lot of US taxpayers with unpaid invoices, those taxpayers should get something back.
This is something that Donald Trump appears ideally suited to do.
It is totally irresponsible to put another dime into this project until it is determined what went so terribly wrong, what can be done to fix it.
I think the withdrawal of the abandonment petition is a sop to the PSC and the legislature so they can grandstand and publicly pillory SCANA before they can recover their costs.
Given what we know (or think we know) about the remaining time and cost to completion and Westinghouse’s current situation, would it make sense to continue? Would a PSC allow a utility to sign a contract with a firm in bankruptcy court?
They’re the first-of-a-kind and regulators who are literally working on the first new NPP of their careers, perhaps even the first one built in their LIVES… and you DON’T expect teething problems?
Especially with the proven malice of Jaczko’s meddling and likely interference from agents he installed deeper in the NRC?
As long as Vogtle keeps going, the accumulated experience will benefit a Summer restart. All they need to do is make sure that whatever had to be fixed at Vogtle is done right the first time at Summer.
I was there. I did not find Westinghouse very helpful or straightforward to deal with. It was hard to believe the low level of support they gave to the customers of a project that was supposedly the future of their company. The working level people were great. But management was not.
There was some conflict between NRC HQ and Region 2 that I saw that caused some confusion that was not helpful. If my experience is representative of the project as a whole, the NRC may bear some blame but was not the cause of the project to fail. I have not heard others in the project conclude that the NRC was a major problem. Neither SCANA management nor even Westinghouse has even hinted they believe there was regulatory overkill. Because there were many design changes in the pipeline for the AP1000, NRC review was threatening to be a bottleneck in the future.
The project design and the supply chain were not in a condition to start this project at the time the contract was signed.
I would expect any knowledge gained from completing Vogtle would be useful in completing VC Summer at some time in the future (which I hope can happen). However, I also would have expected experience from Sanmen and Haiyang to have helped. I am sure it did to some extent. But there is obviously something else wrong.
We don’t do our industry any favors by not acknowleding some uncomfortable facts.
Don’t forget that Moniz had at least two high ranking DOE positions (chief of staff, single head of several departments) filled with UCS infiltrators who have probably not yet been rooted out. And they are both in the position to propagate and fill more positions with UCS agitators through regular hiring now.
Someone needs to be made aware adn some rooting out done…
No doubt there are hostile elements in the NRC and the DOE. The question is how have they sabotaged this project?
Most of the anger I see of those among us who lost our jobs is directed at Westinghouse. Yet in the nuclear community at large, they remain unscathed.
To your earlier comment concerning SCANA stepping into the batter’s box: While they deserve some kudos for taking the leap, I seem to recall a question to my utility CNO back in 2013-ish during an all-hands meeting about why we weren’t building any new reactors. His response was simple: “If you’re building a new reactor in this current climate of low natural gas, your betting the company.” Never forgot that. Pretty ironic that he was correct and everyone is standing around wondering what happened. Also, it’s not like Duke or FPL don’t have plans. Things need to change for these plants to be competitive. We are, after all, in the business to make money.
In what industry do we find the regulatED forcefully condemning the regulatOR as incompetent or malignant?
I can’t see it happening without federal intervention, maybe by TVA or a new agency like TVA and BPA. That’s the only place where there is a pool of cash available to offset the costs.
As an example, the companies involved in VC Summer said it might cost another $11.4 billion to complete the units. In FY 2012 the federal government spent $86.5 billion (in a single year) on SNAP, plus a $3 billion contingency fund. That’s a spend rate of $1.66 billion a week on SNAP, using the $86.5 billion figure for 2012. At that rate, the VC Summer plants could be funded to completion with seven weeks’ expenditures on SNAP (i.e., welfare). While it might seem we’re trading personal welfare for corporate welfare, all I can say is, at least we’ll get something for our money, and the VC Summer people actually do show up for work.
And no, I’m not being cruel or hypocritical. I know diverting those seven weeks’ expenditures from SNAP might mean hardship for many people, but so does the cancellation of a project employing 5600 productive people doing actual, useful work, which would result in valuable national infrastructure that will last for another 60 or 80 years. On balance, from the viewpoint of utilizing national resources, that is a better deal for the taxpayer, who is stuck with the cost in either case.
Really? Take the money from SNAP? How about using the money that’s wasted on the military each each year. That budget is at least 10 times greater than SNAP.
There are a lot of people who are trying real hard to come up with ways to save the nuclear industry. That one my friend is just plain insane.
Yes really. No, not insane. The point was to show the magnitude of federal spending on failed social programs and how that could be re-directed towards producing something of value. Most reasonable people would count reliable, zero-emissions energy infrastructure as something valuable at a national level. So is defense of the country. Paying people to do nothing? Probably not terribly valuable.
Do you have ANY idea how much SNAP/EBT benefits are illegally exchanged for cash at a discount, and how many “poor” people are morbidly obese and obviously need to CUT their food intake quite a bit?
Yes, take it from SNAP. It’s a failure and just feeds corruption. It seems every week there’s a new story of some immigrant shop owner either arrested or fled ahead of indictment for EBT fraud. Food aid should be delivered in-kind only.
So there is no money being wasted by the Defense Department? Really? An August of 2016 audit report from the Office of Inspector General of the United States Department of Defense revealed the following: The Pentagon can’t account for $6.5 trillion. That’s right $6.5 TRILLION. So there is no corruption there…right? All that money went to where it was supposed to go. None of it was stolen and misused. Right….
To the extent that waste at the Pentagon keeps the MIC from starting a war to get their revenues up again, it is far less harmful than the pathologies fed by SNAP.
Yes really. That same IG report faulted accounting procedures for the discrepancy. Much of the DFAS accounting system is based on a multiple-entry process wherein expenditures from one account must be credited to another, and vice-versa. If someone fails to do the dual-entry process, all of the downstream accounting processes multiply the error. So, no, it isn’t likely that fraud accounts for the 6.5 trillion, more likely incomplete or incorrect reconciliation. Sure, some of it may be lost to fraud or theft, but likely a small fraction of the discrepancy.
If the government spends money, it should be on things that benefit the country, especially those things specifically mentioned in the Constitution, national defense being one. I consider a secure energy infrastructure as a national security issue, and have reliable and fully dispatchable electricity is a vital part of that. Paying people to not work, not earn their keep? Probably not a wise thing to do.
Since this site is supposed to be about nuclear power, I’ll refrain from making any more comments on this thread. Let’s just say I completely disagree and we will leave it at that.
I agree totally with Engineer Poet.
On both of his comments.
I work in the AP1000 supply chain, and want to assure you all that the 4 plants under construction share lessons learned with each other. That has worked well enough for HaiYang to almost catch up to SanMen 1.
From what I have seen, 90% of the major components have been delivered to the sites. The problem remaining is the poor labor productivity. For the past 18 months, Westinghouse would issue a boilerplate statement to the effect that “mitigating strategies are being pursued to address scheduling issues”. The situation never got any better despite the WECTEC reorganization or even the few months that SCANA took over direct payments of the contractors.
So who are the construction management teams at Sanmen and Haiyang? Could they be made interested in submitting a bid?
Don’t forget that those projects are also 3 years behind schedule.
To not build the plants will cost a lot more then to build them. The US ambition as a future nuclear leader will be lost. China and Russia will have an easy road to geoeconomical influence. And I am sure the people will be greatful to get rid of the coalplants.
As any new step in energy technology the goverment must support it until it is mature.
The future is nuclear not coal and gas.
The future IS nuclear, but not here in the US. All of our hopes now rest on NuScale getting a reactor built in Idaho. China is wiping the floor with everyone, including Russia. How ironic is it that Westinghouse’s design is now being touted as China’s saving grace, with over 20 units under construction or planned? Technology developed in the US and not even being used. The thing that needs to be faced in this country is the fact that starting from scratch from our long hiatus of building reactors will be painful and expensive, but do we as a country believe it is worth it? If not, let’s move on. If so, we have to understand that there will be some bumps in the road, but the assets are a long term hedge against the energy security and expertise we need for the next 60 years.
Looking above and many other post I truly believe the PSC is not asking the appropriate questions. The decision made by Marsh is simple Make 4-6 B in 12 mnths (2.2B from Toshiba) or make 4-6B in 12yrs. The way he got there is what could be considered criminal in nature. Using a estimate from a friends of the earth Yale PHD that has no vested interest in furthering the project is wrong. All Marsh did was testify before the PSC stating the final numbers would be in the $22B range. The only way to get there is take 9Bil @38% complete and scale it linearly. Looking at the numbers and these are easy to prove 90% major equipment is bought and delivered onsite paid for. 98% site specific design was completed that would have saved 400-600 Engineering personnel in terms of hrs charge billed at $140-180hr. 200 or so would probably remain. Marsh found a way to exploit the ratepayer based on easily debunked criminal numbers. SCE&G had made the decision well before Sante. SCE&G stopped buying additional materials for construction. Marsh indicated that he wanted to finish at least one unit but Sante made it impossible.
I think the Toshiba guarantee payments are spread over a four year period. At any rate, I doubt SCANA or Southern will see much of those payments.
Once again, we see no blame assigned to Westinghouse.
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