Westinghouse Electric Co. is getting closer to stepping away from the construction of new nuclear plants in Georgia and South Carolina — the delayed and budget-busting projects that drove the Cranberry-based firm into bankruptcy in March.
The company has reached an agreement which has yet to be finalized for Southern Co. to take over the project management of Plant Vogle — two AP1000 nuclear power plants that are being built in Georgia.
According to Reuters, Westinghouse is working on a similar service agreement with Scana Corp., the company that owns the V.C. Summer project where another pair of AP1000s are underway.
It was anticipated that by filing bankruptcy, Westinghouse, which is owned by Japanese giant Toshiba, would seek to break its contracts with Southern and Scana, which set a fixed price for the nuclear construction and put Westinghouse in the hot seat for overruns.
Southern's statement released on May 12 confirms that Westinghouse plans to ask the bankruptcy court to reject its contract with the utility owner. It also stresses that Southern will "take all actions necessary to hold Westinghouse and Toshiba accountable for their financial obligations." According to Reuters, Southern has agreed to limit Toshiba’s liability for the Vogtle project to $3.6 billion.
After filing for bankruptcy on March 29, Westinghouse and the two utility owners agreed to a month-long interim assessment period, during which work on the nuclear power plants would continue with the utilities paying Westinghouse and subcontractors for their costs. The assessment period also gives the utilities and state regulators time to decide if construction should move forward or be abandoned; whether the power plants might be converted to run on natural gas; and how continuing the work might affect rate payers.
Both of the interim agreements have been extended. Southern and Westinghouse now have until June 3 to hash out a plan, while Westinghouse's arrangement with Scana may last until June 26.
Because the AP1000 is Westinghouse's technology, the nuclear firm will continue to be involved in the construction projects in some capacity.
Westinghouse spokesperson Sarah Cassella said the company and Southern "have outlined a framework for services contract and will use the extension to reach a resolution."
Anya Litvak: email@example.com or 412-263-1455.
First Published May 16, 2017 2:23 PM