Dispute Flares About Equipment at Abandoned V.C. Summer Nuclear Project
Credit to Author: Sonal Patel| Date: Thu, 16 May 2019 13:24:22 +0000
The fight about who owns equipment at the now-abandoned V.C. Summer 2 and 3 AP1000 reactors in South Carolina intensified on May 14, as key stakeholder Santee Cooper sued lead contractor Westinghouse for certification documentation related to that equipment.
The lawsuit filed with the U.S. District Court for the District of South Carolina, Charleston Division, is the newest installment in a long and bitter dispute about the project. Santee Cooper and its project partner SCANA Corp, a company that merged with Virginia-headquartered Dominion Energy in January, scrapped construction of Units 2 and 3 at the V.C. Summer station in July 2017 though the project was about 64% complete. The project had been in limbo since Westinghouse filed for bankruptcy in March 2017, crippled by financial setbacks stemming from the half-built AP1000 reactor both at V.C. Summer and at Vogtle in Georgia. Westinghouse emerged from bankruptcy in August 2018 after Brookfield Business Partners acquired 100% of the company from Toshiba for $4.6 billion.
The V.C. Summer equipment under dispute includes its steam generators, the reactor vessel and reactor vessel head, control rod drive mechanisms, the main turbine and its generator, the turbine deareator, reactor coolant pumps, the containment vessel, cooling towers, main turbine condenser, reactor internals, main step-up transformers, the pressurizer, the diesel generators, feed water pumps, circulating water pumps, a polar crane, moisture separator reheaters, and other equipment that was contracted for more than $10 million.
“Westinghouse has no legal claim to this equipment,” said J. Michael Baxley Sr., Santee Cooper senior vice president and general counsel on Tuesday. “Westinghouse never listed this equipment among assets that bankruptcy code required it to disclose, nor did Westinghouse claim this equipment when it retrieved assets left behind after it walked off the site July 31, 2017.”
Baxley said that Westinghouse rejected the engineering, procurement, and construction (EPC) contract Westinghouse cites to make the “fabricated claim.” Westinghouse “has not contributed a dime to the maintenance or preservation of the equipment since that date,” Bailey added. “Finally, Santee Cooper and former co-owner SCE&G more than paid for the cost of the equipment while the project was active,” he said.
SCE&G ceded its ownership of the nuclear project equipment in December 2018 through a forbearance agreement that was approved by the South Carolina Public Service Commission. Santee Cooper claims to be the sole owner of the equipment.
Santee Cooper’s lawsuit follows Westinghouse’s own suit against South Carolina’s state-owned public power utility, which it filed on April 5 with the U.S. Bankruptcy Court in the Southern District of New York (No. 17-10751). Westinghouse claimed Santee Cooper was “wrongfully withholding equipment” and refusing to return Westinghouse’s equipment.
The company had potential buyers for that equipment, including Southern Co. Southern has said it wants to buy “tens of millions of dollars” worth of equipment for its Vogtle project, and Westinghouse claimed it already “lost out” on an $8 billion sale opportunity because it couldn’t deliver the goods within a requested timeline. It said, “Without access to its equipment, [Westinghouse] is unable to close on those opportunities and is at risk of losing millions of dollars in potential sale value.”
Westinghouse noted because the nature of most Westinghouse equipment is “unique” and designed specifically for use in a nuclear plant—and a limited number of nuclear plants are being built—it has “few potential buyers” for the equipment. Westinghouse also claimed that it reached out to Santee Cooper “on numerous occasions” to sell the equipment on behalf of both parties and share the proceeds. Santee Cooper refused.
On Tuesday, Santee Cooper asked a New York bankruptcy court to dismiss Westinghouse’s claim of ownership regarding the equipment. “That claim was only filed after Brookfield Business Partners acquired Westinghouse last August, as part of the Plan of Reorganization approved in Westinghouse’s bankruptcy case,” it said.
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)
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