Southern to Take Over Westinghouse Georgia Nuclear Project

Utility owner Southern Co. has agreed to take the lead on building two nuclear reactors at its Vogtle power plant in Georgia from bankrupt contractor Westinghouse Electric Co. as soon as next month.

The Atlanta-based utility owner said in a statement late Friday that an interim contract with Westinghouse will be extended to June 3 while the companies finalize and gain approval for a new service agreement. Just last week, Southern Chief Executive Officer Thomas Fanning said Toshiba Corp.’s Westinghouse unit had “given every indication” it wanted out of the pact to build reactors but was refraining from a decision under the contract that was due to expire Friday.

Westinghouse’s bankruptcy in March threw into question the fate of four U.S. nuclear reactors — the two at Southern’s Vogtle plant and another two being built at Scana Corp.’s V.C. Summer station in South Carolina. The projects were the first to gain U.S. approval for construction in more than 30 years and were once seen as ushering in a new wave of nuclear generation in the country. Fanning has said his company could take over the work at Vogtle if Toshiba provides $3.7 billion to finish it as promised. The deal is said to also depend in part on Scana agreeing to follow suit, so the two companies will be able to share resources.

The companies reached an agreement in principle that “allows for the transition of project management from Westinghouse” to Southern once their current engineering and construction contract is rejected in Westinghouse’s bankruptcy case, Southern said in its statement. “During this time, work will continue at the site and an orderly transition of project management will begin.”

Westinghouse has meanwhile already laid out plans to ditch the money-losing business of building reactors and instead focus on servicing and decommissioning work. It set up agreements with both Southern and Scana to give them more time to decide whether they wanted to continue construction.

In March, less than 24 hours after Westinghouse filed for bankruptcy, Southern’s Fanning said in a Bloomberg Television interview that he flew to Tokyo just to “look the CEO of Toshiba in the eye” and remind him that his company had a “moral commitment” to getting the Vogtle project done. Both Fanning and Georgia regulators have appealed to the Trump administration for help in finishing the project.

In April, Scana and Westinghouse agreed to extend a review of the V.C. Summer nuclear project until June 26.

In Westinghouse’s bankruptcy, the most significant debts are held by Apollo Global Management LLC, which financed an $800 million operating loan, and parent Toshiba. The Chapter 11 case has moved slowly, with Westinghouse recently asking for a two-week delay until May 26 to file a full schedule of its assets and debts.

Read more: http://www.bloomberg.com/news/articles/2017-05-13/southern-to-take-over-georgia-reactor-projects-from-westinghouse