Root cause of Vogtle and VC Summer delays

This column was initially published in the October 16, 2014, issue of Fuel Cycle Week and is republished here with permission.

by Rod Adams

Within a few months of receiving its combined operating license in February 2012 the Vogtle-3 & -4 nuclear power plant project became the subject of reports that it was significantly behind schedule and over budget.

Radio station WABE, Atlanta’s NPR affiliate station, is closely tracking the project and its publicly released reports. WABE has compiled its story segments into a useful print and audio chronology. There are similar stories about the closely aligned Summer-2 & -3 project.

On September 24, I had the opportunity to tour the Vogtle site and learn first-hand how the project is faring. The wrong people are getting blamed. The resulting misperceptions about the projects have the potential to contribute to another lengthy hiatus in nuclear power plant construction in the United States.

The most important thing I learned during my Vogtle visit was that the construction project is moving as rapidly as predicted, that the people on site and in supporting roles are doing a good job, that the workforce hiring challenges are within the predicted boundaries, and that the regulators overseeing the project are performing as expected.

As is demonstrated by the progress being made on the second units at each site, lessons-learned programs are robust and effective.

I also saw a growing inventory of large components that was being stored in an expanding number of temporary structures designed to protect the components from the Georgia red clay and frequently inclement weather.

The second most important thing I learned was that the cost increase and ultimate schedule delay could and should have been predicted on the day that amendment 19 of the AP1000 design certification document was approved in December 2011.

The schedulers could have restarted a clock that should have been put on pause when the U.S. Nuclear Regulatory Commission changed the rules two-and-a-half years earlier with the Aircraft Impact Assessment rule.

Regulatory delays cost time and money

The 36-page Federal Register notice issued in July 2009 acknowledged that the Aircraft Impact Assessment rule was not necessary to provide “adequate protection” and it acknowledged that applying the rule to a project that was already under construction would impose an undue financial burden:

“In making these additions, the NRC is making it clear that the requirements are not meant to apply to current or future operating license applications for which construction permits were issued before the effective date of this final rule. This is because existing construction permits are likely to involve designs which are essentially complete and may involve sites where construction has already taken place. Applying the final rule to operating license applications for which there are existing construction permits could result in an unwarranted financial burden to change a design for a plant that is partially constructed. Such a financial burden is not justifiable in light of the fact that the NRC considers the events to which the aircraft impact rule is directed to be beyond-design-basis events and compliance with the rule is not needed for adequate protection to public health and safety or common defense and security.

What that concession did not admit was the enormous financial and schedule impact of applying the rule to two existing projects for which designs were already certified, firm EPC (engineering, procurement, and construction) contracts were already signed, certified cost and schedule estimates were already submitted to state-level rate regulators, and long lead-time components were already being manufactured.

Instead of moving forward as planned, the Vogtle-3 & -4 and Summer-2 & -3 projects were halted while the engineers began the unpredictable process of designing a compliant shield building using modern, but not-yet-tested construction techniques.

From the moment the redesign effort started, all of the meticulously created schedules and cost estimates became obsolete. As they would say in my previous profession, they were OBE (overcome by events.)

Of course, neither the vendors, Westinghouse and Chicago Bridge & Iron (neé Shaw), nor the utility customers, Southern and SCANA, stopped moving or spending money; there was too much at stake already.

Even though all parties knew that they could not finalize the requirements for the plant’s foundations until the shield building redesign was invented, tested, completed, and approved by the regulator, they could not halt site preparation or component manufacturing.

They could not stop the accumulation of ongoing interest payments on borrowed money. They could not stop construction of the training facilities or the hiring and prequalification training for future operators.

Why not correct the record?

I’ve spent much of the time since my visit trying to understand why no involved party has made a noticeable public effort to correct the record and explain that the delays were outside their control.

The answer I have discovered is completely unsatisfying. I asked some hard questions. Here is an example of the verbal and written replies:

“The issues raised in your questions are subjects of disputes that are currently in litigation. It is not appropriate to comment outside of the litigation process. The parties’ respective pleadings in the litigation set forth their positions.”

Apparently, the vendor team and the owners group would rather litigate and point fingers at each other rather than to tell a truthful story that identifies the real culprit.

Several industry experts have suggested that nuclear plant licensees are extremely reluctant to blame the regulators that still control their destiny.

It is beyond the scope of this commentary to open up the question of whether or not the Aircraft Impact Assessment rule was a reasonable response to the irrational fear induced by the events of 9/11.

It is not even my intention to question the reasonableness of applying the rule that is not required for adequate protection to projects that were already underway.

The mission of this commentary is to explain that the root cause of the schedule delays and cost increases for both the Vogtle-3 & -4 and Summer-2 & -3 projects was a national-level decision to force a substantial redesign after major project decisions had been made.

As long as the regulations do not change again, there now exist several designs that meet the new requirements. Customers that order those designs now should be able to avoid the impact of a midstream design change.

It would be in the best interests of the industry and the projects that are currently underway to make it clear that the Vogtle and Summer projects were the subject of a one-time decision.

They should not be seen as indications that the nuclear industry is incapable of achieving predictable cost and schedule performance.

____________________________

Adams1Rod Adams is a nuclear advocate with extensive small nuclear plant operating experience. Adams is a former engineer officer, USS Von Steuben. He is the host and producer of The Atomic Show Podcast. Adams has been an ANS member since 2005. He writes about nuclear technology at his own blog, Atomic Insights.

 

14 thoughts on “Root cause of Vogtle and VC Summer delays

  1. James Richard Tyrer

    Tom Clements:

    This should be easy to understand.

    The very fact that these LARs are being submitted indicates that there is a burden on the builders. They are forced to make design changes to meet the Aircraft Impact Assessment. So, as a result, they are submitting LARs for the design changes.

  2. Rod Adams

    Mr. Clements,

    I don’t know of any rule changes other than the imposition of the Aircraft Impact Assessment. However, that single change stimulated a major design effort that eventually required three DCD revisions and several years of political controversy before the changes were deemed acceptable.

  3. Tom Clements

    Mr. Mays – Please outline what design changes to the AP1000 the NRC has required other than the aircraft rule. Thanks for your response.

  4. Brian Mays

    Mr. Clements – With all due respect, what qualifies you to evaluate the whether the NRC is providing sufficient diligence? What you have written here indicates that your understanding of the process is quite limited. For example:

    The NRC’s concerns about submitted LARs are often secretarial in nature to make sure the LARs meet the letter of the regulations.

    So you’ve discovered that licensing is a bureaucratic process. Congratulations! What’s the point of writing regulations if they’re not going to be followed to the letter? Unlike the “watchdog” organizations that you are familiar with (e.g., NCI), government regulators don’t have the luxury of being able to play fast and loose with the numbers or the language. When they do that, people go to jail.

    The design changes presented in the LARs are from the company itself and not from the NRC.

    That’s how license amendments work. Please tell me: in what industry does the regulator make design changes?! They don’t. It’s not their job. They either approve an application or they don’t.

    The design changes were made by the vendor to accommodate changes in the rules made by the NRC after the first design was submitted. The process is as follows: (1) the rules change; (2) the design is modified to accommodate the new rules and meet new requirements; (3) the new design must be evaluated by the regulator for compliance.

    If there is evidence that the NRC’s LAR review and approval process is burdensome and causing delays beyond those caused by the companies and vendors I’d like to see it.

    Your reading comprehension is as poor as your understanding of the regulatory process. Please read the article again. Any time a license amendment is submitted there is going to be a delay as the amendment is reviewed. In this case, the design change was required by the Aircraft Impact Assessment rule, which was put in place after the original schedule for construction was made. Therefore, it is simply unfair to hold the project to the original schedule. That is the point of this article.

  5. Tom Clements

    I have participated in the majority of NRC-SNC-SCE&G-Westinghouse weekly calls on the AP1000 COLs and it is quite clear from those calls and actions related to them that the the NRC is bending over backwards to grant requested LARs. The NRC’s concerns about submitted LARs are often secretarial in nature to make sure the LARs meet the letter of the regulations. The design changes presented in the LARs are from the company itself and not from the NRC. If there is evidence that the NRC’s LAR review and approval process is burdensome and causing delays beyond those caused by the companies and vendors I’d like to see it. Based on the calls I’ve participated in and the LAR documents I’ve reviewed, more diligence is needed on the part of the NRC not less.

  6. publius

    “[C]ompliance with the rule is not needed for adequate protection to public health and safety or common defense and security.”
    What possible basis in law does NRC have for making such a rule? If it’s not needed, it’s not needed.

  7. Ashley Finan

    Rod, Didn’t the EPAct of 2005 provide regulatory delay insurance? If these delays were really caused by regulatory changes with the aircraft impact rule, why aren’t the parties pursuing insurance claims? If this doesn’t qualify, why not?
    Thanks for looking into this topic.

  8. Duane Twining

    This is why its crucial to keep politicians accountable. Harry Reid won a huge battle when he traded something to President Bush for an uncontested appointment of Greg Jaczko to the NRC commissioner position. We will see the effects of his reign of terror for years to come. Then they replaced two excellent commissioners with another Reid puppet and someone without a technical or science background. I can’t imagine what’s going to happen next.

  9. Martin Burkle

    I do not see any evidence for your assertion that regulation is the cause of the delay. Do you have a source you are trying to protect or is this a pure person opinion?
    The companies are claiming that poor module fabrication is the cause of the delay. Please check the time to assemble the CA20 assembly. My personal view is that the modules to assemble the CA20 were not manufactured on time.

    When I see lots of rings setting around the site, I think the rings are on schedule but the assembles are behind schedule so the rings can not be placed.

    Do you have some good reason to think that the legal suits against the module manufactures are not based on truth?

  10. Brian Mays

    “Victor Gilinsky, a man from RAND who has worked with the antinuclear movement for about 50 years …”

    When he was not serving as a Commissioner on the NRC, that is.

  11. radams

    @Brian Mays and Sidney Bernsen

    Regulatory creep began occurring long before the AEC was split in two, with its regulatory functions being given to the NRC and with the public health related radiation standards being assigned to the EPA.

    That split, in fact, was the culmination of several years worth of regulatory creep encouraged by the growing antinuclear movement. The real coincidence was the fact that the antinuclear movement began soon after the start of real commercial construction and the announcement by GE that they had sold Oyster Creek by being able to bit a lower price than coal when considered over the lifetime of the plant.

    That lost battle woke up the competitors and spurred their creative response efforts.

    Here is an interesting 1966 piece by Victor Gilinsky, a man from RAND who has worked with the antinuclear movement for about 50 years.

    http://www.rand.org/content/dam/rand/pubs/papers/2008/P3483.pdf

    Notice how he accepts that breeder reactors could provide unlimited power to people, but believes that they should not be developed because they might enable more than a few more nations to have the ability to build nuclear weapons.

    I personally think that the vision of unlimited power was what scared people into action. After all, how would they be able to keep demanding a premium price for their less capable fuel sources?

  12. Dogmug

    The solution is simple: For pro-nuclear experts (such as Rod) and organizations (Breakthrough, Nuclear Literacy Project, etc.) to gain legal standing, and to oppose nuisance regulations.

    Did I say “simple”? I meant to say, “difficult, tricky, frustrating, and exaspirating”.

    But if people like Arnie Gunderson and groups like Greenpeace (which has violated US nuclear security many times) can be granted standing, it certainly must be possible.

  13. Brian Mays

    Sidney – Regulatory creep began to occur about the time of TMI? Hmm … That was just after the AEC was replaced by the NRC, wasn’t it? Do you think that this was just a coincidence?

  14. Sidney Bernsen

    This is indicative of a generic problem we have within the industry. Namely, the apparent reluctance or inability of the industry to challenge the regulator. We did this rather successfully during the early years of commercial nuclear power development where cost and schedules were fairly well controlled with more input from the NSSS supplier and Architect Engineer/Constructor and the earnest application of the backfit rule. However, regulatory creep began to occur about the time of TMI and has continued to grow over the past 35-40 years. Strangely this seems to have coincided with licensees assuming more control of the design and operational commitments and regulatory responses.