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Fluor to manage nuclear project underway at V.C. Summer

Construction
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v.c. summer unit 2

The 2.4-million pound module that will house a number of major components is placed inside the Unit 2 containment vessel at V.C. Summer Nuclear Generating Station in Fairfield County. The module is approximately 90 feet long, 95 feet wide, and 80 feet high. (Photo/Provided)

 

Staff Report
colanews@scbiznews.com
Published Oct. 28, 2015

Westinghouse Electric Company has named Fluor Corp. to manage construction of the company’s two new nuclear construction projects at V.C. Summer Nuclear Generating Station in Fairfield County and another in Georgia.

The South Carolina project is owned and operated by South Carolina Electric & Gas/Santee Cooper while the Georgia project is being built by Atlanta-based Southern Company.

Westinghouse is making the move following Tuesday’s announcement that it plans to acquire the stock of Stone & Webster from Chicago Bridge & Iron, a member of the consortium building reactor units at V.C. Summer. Stone & Webster will continue to be a party to an amended engineering, procurement and construction agreement that SCE&G said it will execute with the consortium, the companies said.

Westinghouse, which will pay about $228 million for Stone & Webster, said Fluor will manage construction of two Westinghouse-designed AP 1000 reactor units at V.C. Summer, 28 miles northwest of Columbia, and two other AP 1000 units at Southern’s Vogtle Electric Generating Plant near Waynesboro, Ga.

Following the Westinghouse announcement, SCE&G, which is acting as Santee Cooper’s agent on the V.C. Summer project, said it has negotiated a new agreement with Westinghouse that offers greater certainty on the project’s completion dates and costs.

The agreement calls for completion of the 1,117-megawatt units by Aug. 31, 2019, and Aug. 31, 2020, respectively. It also adds about $520 million to the project’s total cost raising it to about $13 billion, compared with the original price tag of $9.8 billion announced in March 2008.

“We are excited about the changes in the structure of the construction team and the amendment to the EPC (Engineering, Procurement and Construction) contract for the new nuclear plants and see these changes as very positive,” said Kevin Marsh, SCANA chairman and CEO. “We have strengthened the language in the EPC contract defining regulatory changes which has been the basis for many of our disputes with the consortium in the past.”

The agreement will tie payments going forward to a milestone schedule, increase liquidated damages and add a fixed-price option that if exercised would significantly shift the remaining financial risk to the contractors, the companies said.

“This is a positive development in the new nuclear project, because it offers significant incentives and penalties associated with bringing the units online in 2019 and 2020,” said Lonnie Carter, president and CEO of Santee Cooper. “The new fixed price option would limit construction costs if we choose to exercise it. Finally, we are confident that Fluor will bring solid expertise and resources that will keep the project on track to deliver 2,200 megawatts of clean energy to South Carolina by 2020.”

Fluor will provide project execution and direction, accountability for and management of professional staff and craft personnel, and a focus on safety, quality and project delivery, officials said.

“Fluor is well respected in the industry and has been involved with many large electric generation projects, including our V.C. Summer Unit 1,” Marsh said. “Fluor has deep South Carolina roots and an excellent record of delivering on commitments. “

Fluor’s management plans for construction would become effective at the close of Westinghouse’s acquisition of Stone & Webster.

“We are very pleased with the vote of confidence that Westinghouse, and the nuclear facility owners have placed in our company to manage the construction of these two U.S. nuclear mega-projects,” said David Seaton, Fluor chairman and CEO.

Seaton is a University of South Carolina graduate who began his career with Fluor in Greenville in 1984.

Under the amended agreement with the consortium, the total project cost for SCE&G will increase about $286 million over the $6.827 billion approved earlier this year by the Public Service Commission of South Carolina.

Santee Cooper will pay an additional $112.5 million.

Headquartered in Irving, Texas, Fluor is a global engineering and construction firm that designs and builds complex projects. The company has served clients in the energy, chemicals, government, industrial, infrastructure, mining and power market sectors.

Fluor, which ranks 136th on the Fortune 500 list, has 40,000 employees worldwide. The company's revenue for 2014 was $21.5 billion.

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