The two-unit Vogtle expansion in Georgia faces major challenges that are poised to derail its schedule and ramp up costs—and the project is already behind schedule, a consulting firm tasked with construction oversight of the project told regulators.
In revealing testimony filed with the Georgia Public Service Commission’s (PSC’s) public interest advocacy staff on November 30, Donald Grace, vice president of engineering for Cost Plus Technology—Nuclear Construction Oversight (CPT), noted that the total construction cost—which includes all owner-shared costs but excludes financing costs—to complete the two Vogtle units by the scheduled November 2021/2022 timeframe is $17.1 billion. Only about 60% of the project is complete, he said.
Meanwhile, the project faces several potentially debilitating challenges that could cause delays and drive up costs. Foremost among them are labor shortages. While Georgia Power noted about 7,000 workers were onsite as of December 4, according to Grace, “Obtaining sufficient numbers of qualified craft labor pipe fitters and electricians are necessary to support the planned installation rate for bulk piping and electrical commodities.”
Grace also pointed to potential challenges related to the turnover of systems from the Bechtel Construction Group to the initial test program (ITP) group and completion of all ITP testing. The project could also face hurdles as it completes “specialty sub-contractor” work, which relates to fire protection, heating, ventilation, and air conditioning work and other remaining work involving “stacking of various crafts” in limited spaces.
The Aggressive Schedule
The delays are factored into a schedule performance measurement baseline, which was reportedly established in June 2018. Project management is pursuing an “aggressive” schedule, aiming for completion dates of March 2021 for Unit 3 and March 2022 for Unit 4—which is eight months earlier than the current PSC-approved completion dates, Grace said.
But before completion, Bechtel will need to achieve “mechanical completion”—which is when the project is ready to start hot functional tests. Inspections, tests, analyses, and acceptance criteria required by the Nuclear Regulatory Commission (NRC) will also need to be checked off.
After mechanical completion, the schedule baseline provides six months to the start of fuel load, and another six months to commercial operations, which means mechanical completion will need to be achieved by March 2020 and March 2021. CPT suggested that the total $17.1 billion project construction cost includes a $120 million Bechtel fee and half of an additional $120 million “at risk” fee, which serves as a “cost and schedule incentive” for Bechtel. Delays of the mechanical completion date and increased costs could render the incentive fee to zero, CPT said.
However, if the construction schedule slips beyond the November 2021/2022 dates, the total project cost will suffer increases of roughly $100 million per month, it noted.
Facing a Compressed Time Frame and Serious Challenges
And for now, both units are already behind schedule, Grace said, citing a November 13, 2018, monthly project review meeting report. “For Unit 3, the 2018 year-end goal is to accomplish 20% of the 100% over-all construction effort and, based on the November 13, 2018 Monthly Project Review Report, 62% of this 20% was planned for completion yet 55.5% of the 20% is shown as complete; similarly, for Unit 4 this planned goal and actual were 44% and 40.4%, respectively,” he said.
“What is also noteworthy is that since the June 2, 2018 Schedule Re-Baseline, the Project critical path(s) shown on page 42 of the same November 13, 2018 Monthly Project Review Report have slipped by at least 4 weeks from their baseline dates. Although the Company may have recovery options and potential work arounds, it will be challenging to maintain the schedule in an efficient and cost-effective way.”
Grace noted CPT’s conclusions are partly based on an October 14, 2018, visit to the site, when construction of the project structures and major components were “well-along in the schedule,” and the project had entered “bulk installation of commodities.” However, he reported that schedule slippages for two of the most critical commodities—piping and electrical—were “significant.”
He added: “Out of five major bulk pipe commodities that CPT reviewed, four are significantly behind schedule and three are overrunning their budgets. Similarly, four out of the six electrical bulk commodities that CPT reviewed are also significantly behind schedule and five out of six are overrunning their budgets.”
Much of that issue is related to labor shortages, he noted. To resolve the issue, Bechtel is reportedly pursuing efforts to recruit electricians and pipefitters from Canada, where “there appear to be more electricians and pipefitters than there is work.” However, here too, challenges abound in getting U.S. Department of Labor approvals. Bechtel is also reportedly working with labor unions to obtain approval for non-union labor forces from the Gulf Coast. On the bright side, Grace noted, the DOE’s announcement that it would scrap the Savannah River MOX project could help attract about 60 to 70 additional pipefitters and electricians.
At the same time, the Vogtle project also appears to be falling into a trap plaguing nuclear power plant construction projects in the past, which is that project planning overlaps activities—“e.g., completion of construction of various systems concurrently with ITP’s actual testing of other systems within the same physical area of the units.” Grace said this “stacking of crafts” is exacerbated by the “somewhat limited footprint of the AP1000” (whose reactor containment building is roughly the same size of an AP 600 reactor unit), and could result in both schedule delays and increased cost to pay workers that are not able to perform their jobs.
The challenge that the project faces in turning over systems from the Bechtel Construction Group to the ITP group stems from a compressed time frame. The ITP activities are based on a series of “relatively short schedule bars for each of the 93 systems over a very short period of time,” said Grace.
“To further illustrate, one hundred three turnovers are scheduled from March 2019 through May 2020 for Unit 3; (i.e., an average of seven system packages per month over fifteen months); and, of these packages, 34 of the 103 turnovers (33%) are planned during a three-month period (i.e., the first quarter of 2020). That represents a steep waterfall.” SNC has included “two major and highly probably ITP related risks” in its risk register, he noted, and these issues pose “additional direct costs.” CPT also suggested that the cost contingency included in the $17.1 billion price tag “will be exhausted due to other challenges identified thus far, and that further schedule delays … will pose an additional challenge to completing the project within $17.1 billion.”
According to Grace, the constrained schedule will pose the paramount challenge in completing the two units. In response to a question in the direct testimony that asks whether rework will be necessary owing to attempts to meet an “overly aggressive schedule,” he responded that while setting an aggressive performance baseline is “not necessarily bad,” “one should not set a schedule that is overly aggressive that, as has been observed by CPT on other projects, the personnel do not take it seriously.” Rushing through a project, for example, could result in “unwise actions,” like “installation of conduits and supports prior to knowing where HVAC duct work is going to be run, and then having to revise and/or rework the configuration of conduit runs and supports.”
A Revealing Look at the Project Management’s Inner Workings
Grace’s testimony offers an unusually detailed look at how project managers intend to execute the nuclear expansion, the first-of-its-kind in the U.S. in three decades, and a project that has suffered debilitating delays and soaring cost increases. Total costs for the project were originally estimated at $14.3 billion and original engineering, procurement, and construction agreements signed in 2008 offered a “guaranteed substantial completion date” of April 2016 and April 2017 for Vogtle Units 3 and 4, respectively.
CPT is a joint venture between Critical Technologies Consulting LLC and Cost Plus Consulting LLC that provides consulting services to state regulators, including independent monitoring services for Southern Co.’s now-abandoned Kemper Integrated Gasification Combined Cycle project to the Mississippi Public Utilities staff. The firm’s focus at Vogtle is geared toward independently monitoring, evaluating and reporting on the project cost and schedule for construction of Vogtle Units 3 and 4. The company is also providing an independent evaluation of Southern Co. and Georgia Power’s management decisions in the wake of the March 2017 bankruptcy declaration by Westinghouse, the project’s former engineering, procurement, and construction contractor. The November 30 filing is CPT’s first testimony to regulators related to the Vogtle project.
Since Westinghouse’s bankruptcy, the project’s owners—Georgia Power, Oglethorpe Power Co. (OPC), Municipal Electric Authority of Georgia (MEAG), and the City of Dalton—put Southern Co. subsidiary Southern Nuclear Co. (SNC) in charge of staffing organizations accountable for turnover of the completed projects. Global engineering firm Bechtel in August assumed responsibility for construction of the power block and other critical balance of plant structures, Grace said. Westinghouse, however, continues its role as the “design authority,” which means it is responsible for providing design and components comprising the nuclear steam supply system—but it cannot pursue alternative design changes without review and SNC’s approval.
SNC’s role as overall project manager is the best option “at this point,” Grace said, though he also stressed SNC has “been primarily an operating company (versus a company engaged in managing the design and construction of complex new facility, such as Nuclear Power Plant).”
And while SNC provides several areas in which its core competencies will “highly” benefit the project—including assuring high-quality construction and regulatory requirements are met—it lacks competencies in areas of planning, reporting, and controlling the multiple organizations involved in execution of the project, he said. One area that it may be lacking is “in regard to the need to ‘stand up’ an effective [project controls] organization and administer a yet to be implemented “Project Wide” Earned Value Management System [EVMS],” he added.
CPT’s comments about the project organization, roles, and responsibilities were for the most part favorable. While the quality assurance and procurement plans appeared to mostly be in order, the project execution plan appeared to have some overlapping and redundancy of efforts, and the project controls plan direly needed more effort to fully implement an effective EVMS, Grace said.
Major Accomplishments Onsite at Vogtle
Georgia Power spokesperson John Kraft on December 6 told POWER that significant progress has been acheived “in recent months and the project remains on track for the approved commercial operation dates of November 2021 and November 2022 for units 3 and 4 respectively.” He also noted that the now operational AP1000 units in China—Sanmen 1 and Haiyan 1—“have helped reduce risk for the Vogtle 3 & 4 project and enabled us to maintain project momentum.”
Asked how Georgia Power is fielding challenges outlined in Grace’s report and communicating with the PSC and partners with regards to those issues, Kraft responded that the Vogtle Construction Monitor, which is filed with the Georgia PSC every six months, is “an open and transparent process that provides a detailed look into the Vogtle 3&4 project, including current schedule, budget, challenges and milestones.”
On December 4, Georgia Power announced more remarkable milestones for the project, noting placement of the fourth of five sections that will make up the containment vessel at Unit 3 has been completed.
Workers placed the third—and final—ring as well as the fourth and final reactor coolant pump (RCP) for Unit 3, the company said. Placement of the ring means that a final piece—the containment vessel top head—remains, and it is expected to be placed in 2019.
The ring weighs just under 2 million pounds, and it is approximately 38 feet high and with a diameter of 130 feet. The 375,000-pound RCP was mounted to the steam generator and will serve as a critical part of the reactor coolant system. “The pumps, coupled with each steam generator in the AP1000 reactor design, can be operated at variable speeds during the reactor’s heat-up and cool-down processes. During regular operations, each RCP runs at 1,800 revolutions per minute,” Georgia Power noted in a statement.
In November, the company completed placement of the first two sets of double-decker shield building panels along the outer wall of the Unit 3 containment vessel. The feat required a team of about 15 individuals, ranging from a crane operator, riggers, spotters, engineers and project managers who work together to ensure each section is placed precisely. “The shield building panels are a unique feature of the AP1000 reactor design at the Vogtle nuclear expansion, providing an additional layer of safety around the containment vessel and protecting it from any potential impacts. To date, more than half of the shield building panels have been placed for Unit 3,” the company said.
Work is churning along at Unit 4, too. In October, workers placed two key floor modules—CA35 and CA33—which were to be followed by large concrete placements inside the Unit 4 containment vessel. “CA35 is the roof above the accumulator and CA33 is the roof above the chemical volume control system,” the company said. “Weighing nearly 72 tons, the two modules bring the elevation inside containment to 107 feet—the elevation of the maintenance deck. Since placement, additional work will begin installing rebar on the north side of containment, which will be followed by a concrete placement. These milestones support the upcoming installation of structural steel pieces that support the subsequent floor elevation.”
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)
UPDATED December 6: Adds comments from Georgia Power.