Westinghouse This Week
Southern's Vogtle decision is 3 months away
complicated by Westinghouse lockout
Southern Company chief executive Tom Fanning told shareholders Wednesday it will take more time than expected to decide whether to continue the nuclear expansion at Plant Vogtle near Augusta, Georgia.
Company officials had said they hoped to have a decision by the shareholder meeting, or at least in June, about whether to stick with the project, complete only part of it for now or drop the new nuclear endeavor.
Fanning told the annual meeting in Pine Mountain, Georgia he now hopes to have that evaluation completed in August or “late summer.”
That was three days after Westinghouse created another unknown, locking out 172 union members at its nuclear components manufacturing plant in Newington, New Hampshire, declaring that the sides had reached a stalemate in contract negotiations.
On May 12, Southern reached a deal with Westinghouse to take over construction of Vogtle, and similar negotiations are ongoing with SCANA and Santee Cooper, owners of the Summer nuclear project in South Carolina.
It is taking longer than expected for Southern to get assessments from subcontractors about how much it will cost to complete the project, Fanning told The Atlanta Journal-Constitution following the annual meeting.
Southern will need to get buy-in from the elected Georgia Public Service Commission if Georgia Power wants to collect on further cost increases at the project. The company also would seek agreement from project co-owners, which include Oglethorpe Power (which supports many electric membership corporations, or co-ops, in the state), the Municipal Electric Authority of Georgia (which supports many city utilities) and Dalton Utilities.
“For now, we’ve kept together,” Fanning said. But he pointed out, “They’ve got their own interests.”
Asked who he thinks should take on additional risks or responsibility for future cost overruns if the project goes forward, Fanning said, “That’s a matter of deliberation” at the end of the evaluation.
The possibilities include ratepayers, the federal government and company shareholders, he said. Westinghouse's Newington, N.H., factory makes the reactor vessel barrel and other parts for new AP1000 plants, Utility Dive explained. Disruptions in that supply chain could further complicate construction.
Westinghouse began negotiations with the Boilermakers in April. The contract between the nuclear company and the union expired at the end of April, but work continued under an extension agreement. Both parties then engaged in a mediation process, but it was not successful.
“Westinghouse put forth its best and final offer given the current very serious business conditions. As the Boilermakers were not willing to accept the offer, the company made the difficult decision to invoke a lockout,” Michele DeWitt, interim senior vice president for nuclear fuel and components manufacturing, said in a statement, adding that the company remains “hopeful we will reach an agreement that is in the best interest of all parties.”
Union members, however, say Westinghouse is trying to cut costs by freezing pensions and reducing severance and healthcare benefits.
“We feel that they’re being opportunistic with this bankruptcy,” Duane Egan, chief steward for local 651 at Newington, told the Pittsburgh Post-Gazette. He said the union is willing to forego wage increases, but the contract Westinghouse is offering “strips us of most of our benefits, and we’re not agreeable to that.”
Further discord is likely in the coming months as Westinghouse begins negotiations with the International Brotherhood of Electrical Workers at its plant in Blairsville, Penn., and with members of the Association of Salaried Westinghouse Employees.