Westinghouse Electric Corp.’s bankruptcy filing is casting a shadow on a pair of nuclear power projects that are slated to provide power to dozens of electric cooperatives in the Southeast.
Oglethorpe Power Co. said Westinghouse’s Chapter 11 filing could have a major financial effect on its 30 percent ownership of two AP1000 reactors under development at Plant Vogtle in Georgia.
Santee Cooper, the state-owned South Carolina utility, also is assessing the effect of the bankruptcy petition on the construction of two reactors at the V.C. Summer Nuclear Station.
The state’s 20 co-ops have invested about $3 billion and are responsible for about 70 percent of Santee Cooper’s construction costs through their power supply contract with Columbia-based Central Electric Power Co-op.
Westinghouse and a subsidiary involved in building the reactors filed for bankruptcy protection on March 29. The companies’ losses could run $9 billion in fiscal 2017, according to Toshiba, which owns Westinghouse.
Oglethorpe and Santee Cooper said they continue to pursue the projects, but added it is too early to gauge the full impact of Westinghouse’s action.
“While we remain committed at this time to continuing work at Vogtle 3 and 4, we are coordinating with Georgia Power and the co-owners to determine the best path forward, including the impact of Westinghouse’s bankruptcy on the schedule and cost to complete,” said Mike Smith, Oglethorpe Power president and CEO.
“We will work with our co-owners to hold Toshiba, the parent firm for Westinghouse, accountable for its financial obligations under the project construction contract,” he said.
We are coordinating with Georgia Power and the co-owners to determine the best path forward ...
The contractor’s bankruptcy filing “is expected to have a material impact” on the construction of Vogtle 3 and 4, OPC added in a filing with the Securities and Exchange Commission.
Last month, Westinghouse pushed back the in-service dates for the Vogtle 1,100-megawatt reactors from June 2019 to December 2019 and June 2020 to September 2020, respectively.
“To the extent that the contractor is unable to meet the current revised place in-service dates, such delay could have a material impact on the cost and schedule for Vogtle Units No. 3 and No. 4.”
Through 2016, Oglethorpe spent $3.3 billion of the $5 billion that it committed to the Vogtle expansion. The company says that each additional month of unanticipated delay would cost it $20 million, including financing and owner’s costs.
It also could impact the terms and repayment of a $3.1 billion loan guarantee from the Department of Energy, which is helping to cover costs, the generation cooperative said.
In South Carolina, Santee Cooper said it will spend up to $250 million over 90 days to keep construction going at the Summer plant. It is partners in the project with South Carolina Gas & Electric.
“This agreement will provide SCE&G and Santee Cooper the time necessary to perform due diligence related to cost and schedule,” Santee Cooper CEO Lonnie Carter said. “It gives us critical direct access to resources and information that Westinghouse had not provided us to date, which will be important as we plan for the future of the project.”
South Carolina co-ops also are urging the bankruptcy court to insist that Westinghouse provide information on a 2016 review of the project conducted by its construction management company.
Steven Johnson is a staff writer at NRECA.