CONSULTING

& 2 in Illinois, Pilgrim in Massachusetts, Oyster Creek in New Jersey, and Diablo Canyon 1 & 2 in
California. The number is likely to grow further. A June 2016 report from UBS Securities warns
that even nuclear plants with long-term power purchase agreements might be at risk of early
closure, and listed Xcel Energy Inc.'s Prairie Island plant in Minnesota and Entergy Corp.'s
Palisades plant in Michigan as two examples of nuclear facilities that could close early. 471
New Reactor Projects—Delayed, Suspended, Cancelled
Construction of four AP1000 reactors, Vogtle-3 and -4 in Georgia and VC Summer-2 and -3 in
South Carolina has continued. In an effort to speed up construction of these already delayed
reactors, Westinghouse settled ongoing legal cases with the owners of these plants and purchased
the nuclear construction unit Stone & Webster from Chicago Bridge & Iron. 472 Westinghouse Chief
Executive Danny Roderick was confident that the acquisition would lead to shorter construction
times, claiming: “We’re the largest nuclear company in the world that’s privately owned, and we’re
going to show why that’s a good thing, and get these plants done”. 473 So far, there has been no
significant change in the pace of construction of these four units.
An illustration of the continuing construction problems is at the Vogtle site where units-3 and -4
are falling further behind schedule. According to-testimony before the Georgia Public Service
Commission (GPSC) in December 2015, efforts to catch up haven’t been successful and delays have
become worse. 474 The Vogtle units are now officially delayed by 39 months, and if a US$1.1 billion
tax bill is added, the current cost for Georgia Power, which owns 45.7 percent of the project, is
US$9.5 billion, much higher than the US$6.1 billion the GPSC originally certified for Georgia
Power; assuming that the other share of the project has experienced similar cost increases, the
total costs for the project are estimated to be approximately US$21 billion. 475 A June 2016
assessment by the GPSC concluded that current scheduled commercial operation dates of
June 2019 for unit 3 and June 2020 for unit 4 are unlikely to be met: “It is our opinion that there
exists a strong likelihood of further delayed operation dates for both units”. 476
The latest cost increase at the time of writing was South California Electric & Gas (SCE&G), which
sought and received approval from state regulators for a US$852 million increase in the projected
cost of VC Summer-2 and -3. 477 The company terms its contract a fixed one; according to a
spokesperson: “The fixed-price option provides substantial value to our customers, investors and
our company by limiting the risk of future cost increases”. Others did not agree with this
471 Matthew Bandyk, “UBS Analysts: Longterm Contracted Nuclear Plants Also at Risk of Shutdown.” SNL
Financial, 24 June 2016.
472 Westinghouse, “Westinghouse Acquires CB&I Stone & Webster, Inc.”, Westinghouse Electric Company,
27 October 2015, see http://www.westinghousenuclear.com/About/News/View/Westinghouse-Acquires-CB-I-
Stone-Webster-Inc, accessed 16 June 2016.
473 Phil Chaffee, “Westinghouse’s Strategy in CB&I Stone & Webster Acquisition”, NIW, 2015,3.
474 Walter C. Jones, “More delays for Plant Vogtle”, Savannah Morning News, 11 December 2015, see
http://savannahnow.com/news-latest-news/2015-12-11/more-delays-plant-vogtle, accessed 15 June 2016.
475 NIW, “Vogtle Costs May Have Reached $21 Billion”, 11 Decemer 2015.
476 SNL Interactive, “Ga. PSC staff expects additional delays in Vogtle nuke construction project”,
30 June 2016.
477 Roddie Burris, “SCE&G asking for $852 million more to finish Summer nuclear plants”, The State,
13 June 2016, see http://www.thestate.com/news/business/article83609292.html, accessed 15 June 2016.
Mycle Schneider, Antony Froggatt et al. 136 World Nuclear Industry Status Report 2016