Once-secret records reveal pattern of costly mistakes at troubled nuclear project

Since 2009, companies working to build twin nuclear reactors in Fairfield County have made nearly three dozen changes to the project that drove up costs by about $325 million, according to recently released records and a state agency tracking the work’s progress.

The amount is a fraction of the escalating costs of the $14 billion V.C. Summer expansion project, but documents released May 24 by state utility regulators provide insight into why some of the costs have risen at a time of increasing concern by ratepayers.

The $325 million worth of changes represents the costs of additional work that was not expected when Westinghouse Electric and South Carolina Electric & Gas Co. launched the project about eight years ago. Some of the changes were to improve training for those who would operate the new reactors, while others were for better equipment and construction upgrades, the documents show.

Dukes Scott, director of the state Office of Regulatory Staff, said documents known as “change orders’’ – construction jargon for project changes – had previously been kept confidential. The state Public Service Commission last month ordered their release.

“The change orders would not have been public’’ without the commission’s action, said Scott, whose agency asked the PSC to release the documents. The commission agreed to release them after saying it no longer made sense to keep the information secret. The records had been kept confidential because they were considered proprietary business documents.

Neither SCE&G nor Westinghouse opposed releasing the records.

Overall, the work at V.C. Summer is nearly $3 billion over budget and years behind schedule. The project is in jeopardy because Westinghouse Electric, the prime contractor, has filed for bankruptcy. SCE&G and its partner, Santee Cooper, are trying to determine whether to continue the project.

SCE&G customers already have paid at least $1.4 billion for the reactor project. About 18 percent of a customer’s current bill goes toward the plant’s construction. Customers have been hit with nine rate hikes to finance the work, and critics predict efforts to raise rates further if the project continues.

Reasons for all cost overruns on the project aren’t completely known, but some of the additional costs might be related to delays in construction and delivery of major parts of the power plant.

A new way of constructing nuclear plants, having major sections of the plants built offsite and delivered for assembly, contributed to billions of dollars in cost overruns at both the V.C. Summer plant and another reactor project at Plant Vogtle in Georgia, the Reuters news service reported last month.

According to the records released May 24 by the S.C. Public Service Commission, some of the changes made during the project included:

▪ $12.9 million for nuclear staff training

▪ $1.01 million for simulators to help training staff

▪ $1.5 million for computer maintenance training

▪ $1.6 million for cybersecurity improvements

▪  $15,000 to redesign a radioactive waste pipe

▪  $779,731 to repair and upgrade a road that deteriorated from heavy equipment rolling across it.

In addition to those project changes identified in change order documents, the biggest ticket item was a $250 million bill that includes changes to a nuclear reactor shield building, according to the S.C. Office of Regulatory Staff. Records released by the PSC also show an increase of $36.9 million to change the plant’s layout, an effort to make the site more secure.

SCE&G declined to discuss specific changes to the nuclear reactor project, saying records regarding change orders speak for themselves. The company said information about change orders was on its website.

“We will not offer interpretations or explanations regarding details of the EPC agreement or associated change orders beyond information we provide through our normal disclosure methods,’’ company spokeswoman Rhonda O’Banion said in an email to The State newspaper.

Tom Clements, who heads Savannah River Site Watch, said SCE&G and Westinghouse should have done a better job planning the project to avoid the overruns.

“This does help in a small way to clarify why the project has faced such a dramatic increase in costs,’’ Clements said.

Westinghouse declined comment.

The PSC ordered SCE&G to release the information just before the Memorial Day weekend. The original construction contract between SCE&G and associated documents – the change orders – make up more than 1,500 pages. The original contract, a voluminous document that had been sealed, also was released.

This story was originally published June 3, 2017 at 7:48 PM with the headline "Once-secret records reveal pattern of costly mistakes at troubled nuclear project."