Owners of Vogtle, V.C. Summer Weighing Options After Westinghouse Chapter 11
Southern subsidiary Georgia Power and Westinghouse Electric have, in principle, reached a new agreement that would move project management for Vogtle Units 3 and 4 from Westinghouse to Southern Nuclear and Georgia Power once the current engineering, procurement and construction (EPC) contract is rejected in Westinghouse's bankruptcy proceeding.
Georgia Power announced the agreement in a May 12 news release. The power world has been filled with speculation on what the contractor’s Chapter 11 bankruptcy reorganization might mean for the fate of the new Vogtle reactors in Georgia as well as V.C. Summer Units 2 and 3 being built by SCANA subsidiary South Carolina Electric and Gas (SCE&G).
Westinghouse, which is a subsidiary of Toshiba, has been the lead contractor for development of tow AP1000 nuclear generating reactor units as well as two more AP 1000 units at V.C. Summer.
Westinghouse and some of its subsidiaries filed a voluntary Chapter 11 proceeding at the end of March.
Westinghouse has obtained $800 million in debtor-in-possession (DIP) financing from a third-party lender to help fund and protect its core businesses during its reorganization. The Chapter 11 filings took place in the U.S. Bankruptcy Court for the Southern District of New York in New York City.
Westinghouse has said that it is committed to its AP 1000 business. “Today, we have taken action to put Westinghouse on a path to resolve our AP1000 financial challenges while protecting our core businesses,” said Interim President & CEO José Emeterio Gutiérrez. “We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader.”
For now at least, the owners of Vogtle and V.C. Summer are continuing with construction of the advanced reactors, although they say all options are on the table following the Westinghouse filing.
SCANA will complete its re-evaluation in 2Q
“SCE&G anticipates its evaluation of whether or not to complete one or both Units will be finalized during the second quarter of 2017,” the SCANA utility said in a recent report to the South Carolina Public Service Commission. “The evaluation will include assessment of the relative merits of completing both Units, cancelling or deferring both Units, or completing Unit 2 and cancelling or deferring Unit 3,” the South Carolina utility goes on to say.
SCANA and its partner Santee Cooper have said there are currently 5,000 workers deployed in connection with the V.C. Summer construction project.
Likewise, Southern CEO Tom Fanning says Georgia Power is keeping close contact with the Georgia Public Service Commission as the Westinghouse proceedings unfold.
In a May 2, quarterly conference call with financial analysts, Southern CEO Tom Fanning said Georgia Power continues to be in constant contact with the Georgia PSC. Fanning also said that Southern’s intent continues to be continuing to build the two reactors.
The Southern interim assessment agreement will remain in place until June 3 while the new service agreement is finalized and all approvals are obtained. During this time, work will continue at the site and an orderly transition of project management will begin. As previously stated, the company will take all actions necessary to hold Westinghouse and Toshiba accountable for their financial obligations, Georgia Power said in its news release.
Georgia Power will continue work to complete its full-scale schedule and cost-to-complete analysis and work with the project co-owners (Oglethorpe Power, MEAG Power and Dalton Utilities) and the Georgia PSC to determine the best path forward for customers.
“In addition, the Vogtle Owners (with Georgia Power acting as agent) are continuing negotiations with Toshiba regarding the Toshiba Guarantee,” according to a May 15 8-K financial report filed by Southern with the U.S. Securities and Exchange Commission (SEC).
“However, due to Toshiba’s financial situation, substantial risk regarding the Vogtle Owners’ ability to fully collect under the Toshiba Guarantee remains. The ultimate outcome of these matters cannot be determined at this time,” Southern said.
