Time For A Reality Check: More Delays Are Coming For Georgia Power's New Vogtle Reactors
- Jul 7, 2018 9:59 pm GMT
Note: This article has been updated with additional information from Bill Edge, the Public Information Officer of the Georgia Public Service Commission, and a follow-up comment from author Dennis Wamsted. -Ed.
Georgia Power executives certainly won’t say it and Georgia’s utility regulators certainly won’t acknowledge it, but the reality is there are going to be additional delays at Vogtle 3&4—the already delayed and over budget new nuclear project being built by Westinghouse for the Southern Company subsidiary and a consortium of Georgia municipal utilities south of Augusta.
In a process that resembles a Kabuki dance, every six months Georgia Power is required to file a construction monitoring report with the Georgia Public Service Commission detailing its progress and justifying its expenditures in the last reporting period. (Georgia Power filed its 14th such report, covering the six months from June-December of 2015, in February 2016; it is now pending before the PSC.) Intervenors get to comment during this process, but once that is done, like clockwork, the commission signs off on the report, the utility gets to charge ratepayers for the approved expenses and the whole process starts anew. However, when you look closely it is clear that all is not well with the long-running Vogtle production.
[Bill Edge, the Public Information Officer of the Georgia Public Service Commission, responded with the following comment: “Verification and approval in the Vogtle Construction Monitoring process is not a finding of prudency and does not constitute approval to place the expense in rate base. So, it does not constitute permission for the company to get a return of its investment and get recovery from ratepayers.”
Author’s note: While this is true, the company is being allowed to collect funds from its ratepayers through a term known as construction work in progress (CWIP), which as Georgia explains on its website, “allows [it] to collect from customers, prior to the completion of a project, to offset construction costs. The collected funds compensate for the cost of materials and labor accrued during a project.” Also, when the commission approved the reactors’ construction in 2009 they adopted a measure certifying Georgia Power’s portion of the units’ costs at $6.446 billion, meaning it is almost 100 percent certain that the utility will be allowed to put at least that amount in rate base when Vogtle 3&4 enter commercial operation.]
In particular, it is worth taking a long look at the testimony presented by Dr. William Jacobs and Steven Roetger, who represent the Georgia PSC’s public interest advocacy staff in overseeing construction activities at Vogtle. Jacobs is the project’s independent construction monitor and has raised questions about the plant’s construction schedule virtually since the first dirt was turned (see this story). Roetger is the leader of the staff’s oversight team and has been involved with the project since the beginning. We will get into the details of their testimony below, but their conclusion is striking:
“We conclude that the company has not demonstrated to staff that the current CODs [commercial operation dates] have a reasonable chance of being met. It is our opinion that there exists a strong likelihood of further delayed operation dates for both units.”
To ground their analysis, Jacobs and Roetger refer often in their testimony (which can be found here) to the integrated project schedule (IPS) issued in January, 2015, which set June 2019 (Unit 3) and June 2020 (Unit 4) as the commercial start-up dates for the two reactors. The problem, the two write, is that the contractor “has failed to achieve the critical project milestones” needed to meet those dates. For example, in just a year the schedule to complete one such milestone at Unit 3 (raising the concrete height on the east side of the shield building to 100 feet) had slipped by more than 300 days. Another delay, of 172 days, was recorded in installing shield building panels since January 2015.
Clearly Still Plenty To Do At Vogtle #3
Schedule problems are also evident on Unit 4, the two continued. In particular, installation of the CA20 module, which will be used for fuel handling and spent fuel storage, is now 228 days behind schedule compared to the January 2015 IPS. Similarly, installation of the CA01 module, which will contain the steam generators, is an estimated 152 days behind schedule while module CA03, part of the reactor’s safety system, is a whopping 337 days late.
“Furthermore,” the two wrote, “since January 2016, milestones have continued to slip.”
The Problem With “Pinning”
So with all the delays, it is a fair question to ask why Georgia Power and Westinghouse, the lead contractor, can still dance around the question of when the reactors actually will start producing power. To maintain the 2019/2020 dates, Jacobs and Roetger explain, the contractor has adopted a technique called “pinning” or “constraining” certain activities within the IPS, which then keeps downstream activities ‘on schedule’ as well. As an example, they cite the installation of course 7 on Unit 3’s shield building, which according to the May 2016 IPS has been pinned at its previous completion date “even though the required precedent activities have slipped over 100 days.”
Proof of the Kabuki nature of the commission’s oversight activity can be seen clearly in looking back at the 13th Vogtle Construction Monitoring (VCM) report, where Jacobs and Roetger raised almost exactly the same concerns about Westinghouse/Georgia Power’s use of “pinning” as a means of maintaining the schedule:
“Eight other Unit 3 critical path activities are pinned in the October 2015 IPS. Most of these show significant negative variance to the January 2015 IPS. The contractor justifies this approach by stating that they are developing mitigation strategies to prevent these delays from impacting the project completion dates. …the contractor has had limited, if any, success in mitigating schedule delays. While mitigation may be effective in maintaining the current delays or reducing them to some degree, based on past performance we believe that it is unlikely that the contractor will be able to develop and implement mitigation strategies that will prevent the current existing delays from impacting the current completion dates for Units 3 and 4 of June 2019 and 2020, respectively.”
In addition to pinning activities, the project schedule put forward by Westinghouse (and, by extension, Georgia Power) simply assumes that the amount of time required to complete future activities can be compressed. To this end, the utility’s 14th VCM report to the Georgia commission (which can be found here) outlines a number of these time-saving techniques, including two that need mentioning:
- First, the company says it will install “structures over construction areas, including areas of the nuclear island, to protect work activities from inclement weather.” The utility has operated reactors at the site for almost 30 years; did it really take managers there that long to realize it rains on occasion in southeastern Georgia?
- Second, the company says it will standardize “construction sequence above elevation 100 feet to synergize planning.” Can anyone really tell me what that means or, more importantly, how it is going to save any time?
Jacobs and Roetger are more polite, but their criticism is telling, nonetheless: “Since the beginning of construction on the project to the present, mitigation has been ineffective in eliminating delays and only recently slightly effective in reducing existing delays. The contractor’s assumption that future mitigation will have a positive impact on the IPS is not supported by its performance to date.” At a different point in their testimony, the two pile on, noting that to keep to the current schedule “the contractor must successfully implement as yet unproven mitigation strategies to recover current delays and also complete critical construction sequences in significantly less time than originally planned due to compression of the project schedule.” Possible? Yes, but as Jacobs and Roetger point out: “Until now the contractor has taken significantly longer than planned to complete scheduled activities.”
In short, everyone can pretend that everything will be completed on time—even if everyone knows that it is not going to happen.
New Scope To Construction Work
Beyond this, there is the looming transition at the reactor construction site from one mainly of outside rebar setting and concrete pours to inside containment installation work involving the nuclear steam supply system equipment, electrical, HVAC and other piping. There have been no delays in this work only because it has not begun, or as Jacobs and Roetger said: “This means that the contractor has yet to be challenged by that work. It is highly unlikely that this work will proceed exactly as forecast for the reasons articulated below.”
Among their concerns:
- The aggressive time frame of overall completion;
- The congested nature of the inside containment area, which will only increase as components are installed;
- The first-of-its-kind nature of this work for Westinghouse’s AP1000 design;
- The vertical nature of the work, which will require careful staging to ensure one set of workers is not impinging on the access needed by another set; and
- The need to get numerous craft workers (electricians, welders, HVAC, and pipe fitters, to name just a few), quality assurance, field engineering, and other oversight workers in and out under tight individual schedules without compromising their work or the work of others.
On a more general critique, and while acknowledging that Westinghouse’s “schedule adherence” has been better in the past several months, Jacobs and Roetger note that construction activities must speed up across the board for the project to have any chance of being completed by 2019/2020 as currently scheduled. As of the end of 2015, construction was 28.4 percent complete, but a more worrisome figure is that of the containment buildings; as of May 31, 2016, Unit 3 was just 15.3 percent complete, while Unit 4 was only 7.1 percent finished. To meet the current schedules, Jacobs and Roetger wrote that the amount of work completed each month through September 2017 must increase “to a rate three times the amount that has ever been achieved to date on this project.” Again, it’s possible, but likely? I certainly wouldn’t bet on it, especially given that the average monthly construction completion rate did not even come close to the necessary level during the first five months of 2016, the first period of the newly consolidated contracting team with Westinghouse at the helm and Fluor as the principal construction subcontractor.
And the real kicker is that all of the above has to happen just as predicted by Westinghouse and Georgia Power for the reactors to have a chance of entering commercial service as currently scheduled. As Jacobs and Roetger conclude: “If the contractor is not able to successfully meet all of the above challenges, the schedule will not be achieved.”
If you believe this is all going to happen, you should go buy a lottery ticket, your odds of winning are probably about the same.
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