Southern’s Nuclear Reactors May Be Delayed, Monitor Says

Southern Co. (SO)’s new nuclear reactors face delays that may boost costs beyond the $14 billion budgeted, an independent construction monitor said.

The reactors, due to be completed in 2016 and 2017, are already running seven-and-a-half months late and could be set back further by “additional potential delays recently identified” by Southern’s construction partners, William Jacobs said in testimony filed on the Georgia Public Service (PEG) Commission’s website today.

Jacobs said the latest delays stem from improperly installed rebar and a design issue, the details of which were redacted from his testimony to protect trade secrets.

Southern and the three co-owners of the Vogtle nuclear construction, 26 miles southeast of Augusta, Georgia, “face significant challenges in maintaining the project forecast at or below” the budget approved by Georgia regulators, Jacobs said. “A possible schedule delay as discussed above would impact the financing cost of the project.”

Thomas Fanning, chairman and chief executive officer of Atlanta-based Southern, disclosed the rebar problem April 25 and acknowledged Vogtle’s construction schedule had been affected when the U.S. Nuclear Regulatory Commission took a half-year longer than anticipated to approve the design.

Jacobs, who is hired by Georgia regulators to monitor the project, said federal inspectors determined in April that rebar installed at Vogtle didn’t follow the design approved by the NRC or code established by the American Concrete Institute.

Removing Rebar

After “lengthy” negotiations with federal regulators, Southern and its construction partners agreed to remove some of the installed rebar and follow the original design, Jacobs said.

Doing so would delay pouring of first nuclear concrete, a construction milestone, by about three months until September or October, Jacobs said.

Southern and its partners have not worked out a construction schedule for the Vogtle reactors and are negotiating who will pay for initial cost overruns expected to total $400 million for Southern, based on its 45.7 percent ownership stake.

A Southern spokesman didn’t immediately return a voice-mail message.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.