Legal & Regulatory

Westinghouse Asks Court to Stop Cancellation of Vogtle Contract

Westinghouse Electric has asked a New York bankruptcy court to stop Georgia Power from terminating Westinghouse’s contract to continue construction of two new nuclear reactors at Plant Vogtle near Waynesboro, Georgia.

Westinghouse filed for bankruptcy earlier this year, in large part due to massive cost overruns from the Vogtle project and the V.C. Summer nuclear project in South Carolina. Westinghouse was replaced by Southern Nuclear, a subsidiary of Southern Co. as is Georgia Power, as the primary overseer of construction of the new twin AP1000 reactors at Vogtle. Southern Nuclear operates the two existing units at the nuclear plant.

Georgia Power has said Westinghouse’s bankruptcy filing showed it had abandoned the Vogtle project, voiding its contract. Georgia Power also has said the cost overruns at Vogtle were due to myriad problems with Westinghouse’s design and construction, which led to the utility’s decision to move forward with other contractors.

Westinghouse on September 25 challenged the claim it had abandoned the project, filing an objection to Georgia Power’s motion for a court order that would lift the bankruptcy court’s automatic stay, which would allow Georgia Power to terminate the rejected engineering, procurement, and construction (EPC) agreement for the project. Westinghouse wants the stay to remain in place. The objection was filed in the U.S. Bankruptcy Court for the Southern District of New York.

Westinghouse rejected the original EPC agreement for Vogtle as part of its bankruptcy. However, the Department of Energy (DOE) in July approved a service agreement between Westinghouse and Georgia Power for the Vogtle expansion. That agreement said Westinghouse would support engineering, procurement, and licensing of the project, and provide the intellectual property required for the expansion, with Southern Nuclear taking over as primary contractor.

The Georgia Public Service Commission (PSC) on August 15 said it supported continuing construction at Vogtle, provided the economics made sense, even as reports said the project’s cost had ballooned to more than $20 billion. On August 31, the project’s owners—Georgia Power, Oglethorpe Power, Municipal Electric Authority of Georgia (MEAG Power), and the City of Dalton—filed a recommendation with the PSC to continue construction, and said they had contracted with global engineering, construction, and project management firm Bechtel to manage daily construction efforts, with Bechtel working under the direction of Southern Nuclear.

The PSC last week scheduled hearings in December to discuss the project’s future, and said a decision on continuing state support for construction could come in February 2018.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine)


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