Report: Westinghouse Bankruptcy Raises “Fundamental Questions” About Nuclear’s Future
The impact of Westinghouse Electric Co.’s March 29 bankruptcy filing will be felt throughout the U.S. nuclear power industry, accord to an April 19 report released by the Congressional Research Service (CRS).
“The bankruptcy filing raised fundamental questions about the future of the U.S. nuclear power industry, and particularly whether four new reactors that Westinghouse is constructing for electric utilities in Georgia and South Carolina will be completed,” the report says. “The four reactors are the first to begin construction in the United States since the mid-1970s, and the nuclear industry had hoped they would pave the way for many more.”
Westinghouse, which has had a hand in nearly half of the nation’s 99 operating commercial reactors, said it its Chapter 11 filing that it intends to undertake “a strategic restructuring as a result of certain financial and construction challenges in its U.S. AP1000 power plant projects.”
Currently, Westinghouse is involved in efforts to build new AP1000 reactors at Plant Vogtle in Georgia and Virgil C. Summer Nuclear Station in South Carolina.
The projects have been riddled with cost overruns and delays. The most recent estimates suggest completion dates for the four units in 2019 or 2020. The Vogtle units are currently more than $3 billion over budget and the Summer units have exceeded their initial cost estimate by 21.6%.
“The four reactors were originally scheduled to be completed by 2016-2018 at a cost (excluding interest) of about $4.8 billion per unit at Vogtle, according to Georgia Power’s most recent progress report, and $5.7 billion for each of the new Summer units, according to a recent [South Carolina Electric and Gas Co.] regulatory filing,” the report notes.
Westinghouse’s bankruptcy is “primarily from a series of unforeseen challenges that significantly delayed and increased the cost of construction of the nuclear plants in Georgia and South Carolina,” the filing says.
Of particular concern to the CRS is the $8.3 billion in Department of Energy (DOE) loan guarantees issued for the Vogtle projects. “Congressional concern has arisen that the Westinghouse bankruptcy could place taxpayers at risk for the DOE guaranteed loans that have been issued to date,” the report says. “DOE’s loan guarantee agreements with Georgia Power and Oglethorpe stipulate that if the Vogtle project is terminated, the borrowers must repay the entire outstanding loan amount in five years.”
The report does not address what would happen if the outstanding amount were not paid in five years.
—Abby L. Harvey is a POWER reporter.