2nd undisclosed report shows delays, poor oversight doomed SC nuke project

SCE&G and VC Summer: By the numbers

Timeline of the effort by SCE&G, Santee Cooper and Westinghouse to build two more reactors at VC Summer nuclear station in Fairfield County
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Timeline of the effort by SCE&G, Santee Cooper and Westinghouse to build two more reactors at VC Summer nuclear station in Fairfield County

The company that built the original V.C. Summer nuclear plant discovered a litany of problems when its engineers returned to the site in 2016 to assess the construction of two new reactors.

Fluor Corp. found delays in obtaining equipment and workers with limited experience were making it difficult to complete the project on time and on budget.

The timeline to build the project, one of the first built in the United States since the 1980s, also was too ambitious, according to an October 2016 report that Fluor conducted for lead contractor Westinghouse. Charts in the report also indicate the cost to finish the project was soaring.

State regulators and legislators said Thursday that they were unaware of the Fluor report’s existence until told of it by The State.

The Fluor report, obtained by The State, is the second major previously unknown engineering study to surface this year outlining problems at the Summer project that eventually led to its failure. The Bechtel report, released by Gov. Henry McMaster in September, detailed similar issues.

Two utilities, SCE&G and state-owned, Santee Cooper abandoned the Summer project July 31 after spending $9 billion and nearly a decade on the effort.

The two utilities charged customers more than $2 billion for the work. Their customers still are paying for the bungled effort through higher monthly bills.

The companies said the Summer project had become too expensive to finish, blaming contractor Westinghouse.

Senate Majority Leader Shane Massey, R-Edgefield, said Thursday that Fluor’s findings reinforce that “Westinghouse was apparently completely inept, and the utilities did a poor job of overseeing the project.”

Regulators did not know of report

The report’s emergence raises new questions about whether SCE&G or Santee Cooper should have disclosed its existence to state regulators and investors in SCE&G’s parent corporation, SCANA.

Those utilities withheld the Bechtel report, finished in February 2016, from state regulators until this fall. The two companies also withheld a more critical draft of the Bechtel report that showed even greater problems, according to the S.C. Office of Regulatory Staff, the state agency charged with looking out for utility ratepayers.

Officials with the Office of Regulatory Staff said they knew Fluor had done some type of Summer study. But agency officials had not seen the report until The State newspaper contacted them, seeking comment Thursday.

Nanette Edwards, the agency’s deputy executive director, said it is difficult to say how helpful the report would have been in guiding regulators in their oversight of the nuclear project. Department officials plan to read the report as soon as possible to gain a fuller understanding, she said.

Fluor was brought in by Westinghouse to estimate what it would take to complete the foundering project.

A SCANA spokesman said Thursday that utility did not obtain a copy of the report until late March 2017, about the same time that Westinghouse sought bankruptcy protection.

SCANA’s SCE&G subsidiary should have told regulators about the report, said Edwards of Regulatory Staff. The Cayce-based utility could have summarized the report in quarterly construction reports that it was required to file with the state Public Service Commission, which regulates the utility, Edwards said.

That commission signed off on the V.C. Summer nuclear project, as well as nine related rate increases that have cost SCE&G customers $1.8 billion so far.

“That quarterly report is supposed to provide an update on the progress of construction,’’ Edwards said. “That is how we are supposed to monitor.”

Santee Cooper spokeswoman Mollie Gore said that state-owned utility also obtained the Fluor study after Westinghouse filed for bankruptcy.

“This is something that we didn’t know about, so, obviously, we had not reviewed it until after Westinghouse’s bankruptcy,’’ Gore said of the report.

Santee Cooper used the study, along with other information, to help it decide to abandon the project in late July, she said.

After Westinghouse’s bankruptcy, Santee Cooper and SCANA conducted in-house studies to determine if they could complete the reactors without the contractor, concluding they could not.

Gore referred questions about the report’s details to Fluor.

Fluor spokesman Brian Mershon declined comment when reached Thursday by The State.

Lawmakers in the dark, too

S.C. lawmakers Thursday said they were unaware of the Fluor report.

Still, they said, Fluor’s findings show SCE&G had not addressed problems highlighted months earlier in the Bechtel report.

“That, to me, speaks to management and oversight,” said Sen. Massey, who co-chairs the special Senate committee investigating the Summer failure.

State Rep. James Smith, a Columbia Democrat running for governor in 2018, said the Fluor report offers “further evidence that this project should have been abandoned at an even earlier date to save on the losses.”

Fluor, a national corporation with expertise in nuclear construction, built the first reactor at V.C. Summer in the early 1980s.

The company’s report looked at both the Summer project and a similar project under construction at the Vogtle nuclear site, in eastern Georgia. Fluor also found problems at Vogtle.

At both sites, the report used a ratings system that scored construction “poor” to “fair” in key areas.

Among the findings at Summer:

<bullet>Shipments of equipment were delayed by nearly four weeks in some instances. Such delays can result in workers being used inefficiently, driving up the cost.

<bullet>The project’s aggressive schedule limited flexibility in how work was completed and required large amounts of overtime for workers, driving up the cost.

<bullet>Staffers at part of the Summer construction site had “very limited experience’’ in the work that needed to be done.

<bullet>The locations of some temporary offices, warehouse areas, parking and other facilities had “negative influence on productivity.’’

In addition, charts in the 183-page report indicate that construction costs would be higher than Westinghouse expected.

Fluor declined to elaborate on the charts, referring questions to Westinghouse and SCANA.