SCE&G brings in Fluor to take over V.C. Summer plant nuclear construction

SCANA-owned utility South Carolina Electric & Gas Co. has reconfigured its primary construction contract for two reactors at the V.C. Summer nuclear plant near Jenkinsville, the company said Wednesday.

The new contract replaces Chicago Bridge & Iron Co. as lead construction contractor with Texas-based Fluor Corp. Chicago Bridge & Iron Co. had come under heavy criticism by SCANA and SCE&G for critical parts fabrication delays at its Louisiana plant. CB&I’s involvement in the Summer project would end with the new contract.

The new engineering, procurement and construction agreement calls for the Unit 2 and Unit 3 reactors to by completed by August 2019 and 2020, respectively. The new plan could further boost the plant’s cost by another $774 million, according to a SCANA news release.

That would raise the projected cost of the V.C. Summer nuclear plant expansion to roughly $12 billion, excluding the finance and transmission station costs.

The two new Summer reactors, approved by the Nuclear Regulatory Commission for licensing and construction in 2012, carried a combined initial price tag of $9.8 billion. But those costs rose by $1.2 billion in 2014, an increase SCE&G blamed on parts fabrication delays by Chicago Bridge & Iron.

SCE&G said terms of the new construction contract with Fluor, which becomes effective immediately but is not expected to be finalized until December, could limit future construction cost increases at the new reactors.

Chicago Bridge & Iron had been part of a consortium to build the V.C. Summer reactors that included Westinghouse and Stone & Webster Construction Inc. Westinghouse plans to purchase Stone & Webster, creating a consortium that now includes Fluor.

“We have strengthened the language in the EPC contract defining regulatory changes, which has been the basis for many of our disputes with the consortium in the past,” said Kevin Marsh, SCANA chairman and CEO, in a statement included in the announced contract switch. “We also have negotiated a fixed price option which, if exercised, would limit the construction cost of the new nuclear plants.”

SCE&G owns 55 percent of the Summer plant and public utility Santee Cooper owns the remaining 45 percent. Santee Cooper’s board approved the contract change late Tuesday in a special called meeting.

“This transition is a positive development for all stakeholders in the current nuclear projects as it provides, through Westinghouse, a single focus of responsibility and accountability for the completion of” the Jenkinsville plants, said Philip K. Asherman, CB&I's President and CEO, in a released statement.

Because the proposed new Summer contract involves changes in the project’s costs and completion schedule, SCE&G will have to go back before the South Carolina Public Service Commission for approval of the contract changes. The utility, which is regulated by the PSC, sought and received the $1.2 billion capital cost increase for the Summer plant in September.

If the reactors are completed according to the new schedule, they would be behind schedule by two or three years.

The new Unit 2 reactor at Summer initially was scheduled to be completed by April 1, 2016, at the earliest and June 1, 2018, at the latest. The Unit 3 reactor carried an initial early completion date of January 1, 2019, or June 1, 2021 at the latest.

This story was originally published October 28, 2015 at 7:14 PM with the headline "SCE&G brings in Fluor to take over V.C. Summer plant nuclear construction."