Monday, March 04, 2013

Buyers Remorse in Georgia?

You just knew it would happen: after Georgia Power announced it would take another year to bring the two new reactors at Plant Vogtle online, the Associated Press intoned:
As the cost of building a new nuclear plant soars, there are signs of buyer's remorse.
See last week’s post below this one about the “soaring costs,” I was interested to read where the buyer’s remorse was coming from. The main source would be Georgia Power or its parent, Southern Co., right? Not a word about any such remorse here. Well, then, who or what does the article have weeping brokenly?
[A] Georgia lawmaker sought to penalize the company for going over budget, announcing a proposal to cut into Southern Co.'s profits by trimming some of the money its subsidiary Georgia Power makes.

The legislation has a coalition of tea party, conservative and consumer advocacy groups behind it, but faces a tough sale in the Republican-controlled General Assembly. GOP Rep. Jeff Chapman found just a single co-sponsor, Democratic Rep. Karla Drenner.
So, one state representative who can’t get much traction on his bill. Tea party?
"Conservatives do not believe in incentivizing failure," Debbie Dooley, a co-founder of the Atlanta Tea Party, recently told Georgia lawmakers. "They should not profit from this mistake."
But conservatives do believe in providing a lot of emission free electricity to their constituents, which is likely the reason that bill isn’t finding supporters. And I would hesitate to say a one year delay equals failure or a mistake.
A certain, shall we say, enhancement of language is not alien to southerners (I’m one myself, from Georgia even) and very useful in political discussions, but these feel like a few vagrant folk angry at Georgia Power, not evidence of buyers remorse – which I would take to mean the owners are boo-hooing about taking on this horrid project. But no. More below on the company’s perspective.
To be fair, the article goes on to talk about the closing of FP&L’s Crystal River facility in Florida, but the evidence there doesn’t seem any more compelling.
One of our  valued commenters asked a fair question: why are the two reactors at Vogtle delayed? World Nuclear News (from September 2012) has a fair summary:
Work began to install steel reinforcing bar (rebar) for the base mat in the nuclear island for Vogtle 3 in February, soon after the plant received its construction and operation license (COL) from the US Nuclear Regulatory Commission (NRC). However, in March the NRC ruled that a design for the installation of floor rebar developed by Georgia Power's contractor did not conform with the DCD [design control document], and installation work was put on hold pending investigations and license amendment requests. Permission was granted to restart rebar installation in early August. Georgia Power says it expects to receive approval of its license amendment request from the NRC in October [this did happen – see here], when it will start pouring the first nuclear concrete for unit 3.
In its report to the Georgia Public Service Commission (Eighth Semi-Annual Construction Monitoring Report), issued in February, Georgia Power wrote:
Under our current schedule assumptions, the Facility [Vogtle 3 & 4] will bring approximately $4 billion in additional value to customers when it is completed as compared to alternative generation available today.
Even in extended delay scenarios performed at the Commission’s request, the Facility remains economic.
This whole book is worth a look, though it’s pretty dense. Maybe two or three looks over a couple of days.


Anonymous said...

Wow, a politician seeking to penalize an organization that is overbudget on a project. Hyprocrisy, anyone? Perhaps a Blue-Ribbon Commission should be appointed... that'll get things straightened out, right?

Anonymous said...

Does the company have recourse to recover costs of the delay from their rebar contractor, if that is where the foul-up occurred? Why did it happen in the first place? Is there something extra-special about this design that made it more difficult than rebar designs we have done in previous plants? I mean, we're talking rebar here, which is something we should be able to understand and implement properly. As an industry, we've dealt with rebar before. It isn't like landing on the moon or curing cancer. My point is that if we're really going to make a go of it we can't have slip-ups with standard stuff like rebar. As has been noted, there are enough challenges looming already with getting newer design plants built. We can't afford to bung up simple stuff if there are more daunting challenges in store.

Engineer-Poet said...

There seems to have been no fault on the part of the rebar contractor.  The NRC certified construction based on a particular version of a common rebar spec.  The contractor used the current version of the spec, which was not the same version.  What I've read is that the particular version to be used was not specified on the plans given to the contractor.

A trifling change in rebar specs, on something as over-engineered as a concrete base mat, is an absurd thing over which to halt construction.  It should have been approved by the NRC and work gone forward immediately, with plans for future units updated appropriately.