Nuclear powerU.S. first nuke in thirty years mired in costly legal wrangling

The U.S. first nuclear construction project in thirty years is the center of a $900 million lawsuit pitting Westinghouse Electric Co. against Georgia Power.

Georgia Power commissioned two units of the AP1000 nuclear power plant for its Vogtle power station in Waynesboro, Georgia. Cost overruns and delays have resulted in a legally battle with the plant developer, Westinghouse Electric Co.

The $14 billion project is about twenty months behind schedule and $900 million over budget. Pittsburgh Post-Gazette reports that Westinghouse and its construction partner, Stone & Webster, claim that changes made to the original design of the 2008 contract with Georgia Power were necessary due to new regulations by the Nuclear Regulatory Commission (NRC). Georgia Power counters Westinghouse’s claim by citing deficiencies in Westinghouse’s design and poor execution of the work as reasons for the cost overrun and delays, insisting that Westinghouse should pay the extra cost.

The court battle follows the failure of the two sides to reach a mediated settlement. Westinghouse did not wait long: after the last mediation session concluded at the pre-arranged hour of 20:00on 1 November 2012, Westinghouse, at exactly 20:00:01, electronically submitted a lawsuit against Georgia Power in a Washington, D.C. federal court.

An attorney for Georgia Power simultaneously filed a lawsuit with the clerk of the Southern District of Georgia federal court at 20:00 that same day.

“The events that ensued are the kind scarcely encountered outside the pages of a law school exam,” wrote Colleen Kollar-Kotelly, a U.S. district court judge in the District of Columbia. Kollar-Kotelly called it a “highly choreographed ‘race-to-the-courthouse’ ” of immense consequence, and in September 2013 declared that the dispute would be handled in the Georgia court.

The Gazette notes that the construction of the new plants at the Vogtle power station mark the first time a modular nuclear plant is being built in the United States – the parts are produced elsewhere and assembled on site. The plant must also adapt to new regulations from the NRC, including a 2010 ruling that buildings which house nuclear reactors must be able to withstand an airplane crash. Southern Co., parent company of Georgia Power, warned shareholders in its August quarterly report that issues with construction, fabrication, delays, and additional claims by Westinghouse are likely, which “could result in increased costs either to the owners, the contractor, or both.”

In August 2013, Williams Jacob, an independent market monitor for the Georgia Public Service Commission, and Steven Roetger, an analyst for the commission, testified that although there has been increased cooperation between the two parties to proceed with critical activities needed to complete the construction; there is doubt whether the new goal — to begin operation of the two units at 2017 and 2018 —  is “reasonable and achievable.”

Sheila Holt, a spokeswoman for Westinghouse, noted that “progress at Vogtle is continuing well. Disputes of this type are not unusual for the magnitude of this project.”

Sola Talabi, a risk manager with Westinghouse, agrees, noting that the nuclear power industry is no stranger to costly legal battles.”Half the players in the industry are usually suing each other one way or another,” he told the Gazette.