WAYNESBORO, GA. – At 4:30 p.m., a siren sounds at the Vogtle nuclear worksite, and the exodus is on.
Workers from across the nation have moved here to build two nuclear reactors, so from Missouri and Texas, welders and electricians pile into cars and trucks. From Georgia and South Carolina, they form a line out the gates to a country road that’s stop and go.
Georgia’s Vogtle nuclear reactor project is just 130 miles from South Carolina’s V.C. Summer Nuclear Station, but activity at the two complexes couldn’t be more different.
At South Carolina's V.C. Summer site north of Columbia, parking lots are mostly empty. Many areas resemble junkyards after workers there lost their jobs and walked off the site in July. Left behind: trucks with their doors wide open; construction plans scattering in the wind, and tens of millions of dollars in equipment and supplies, now rusting and rotting away.
But here in the pine lands and cotton fields south of Augusta, nearly 6,000 workers still have jobs. And, at shift change on this rainy Monday afternoon, they create an hour-long traffic jam. Behind them, a dozen cranes rise from a vast parking lot that’s still packed. Two new cooling towers stand so high they merge with rain clouds.
The Vogtle and V.C. Summer nuclear projects were identical twins. Both had the same reactor design, the same contractor, the same modular construction strategy. They began at roughly the same time in the late 2000s. Both benefited from new laws that shifted financial risks from utilities to ratepayers. But only one of these twins survived. Why?
A deeper look at the Vogtle nuclear project helps explain what happened to its South Carolina twin, how Westinghouse bungled construction at both sites. It exposes South Carolina’s lax oversight and how this failed to give ratepayers a true picture of V.C. Summer’s problems. Georgia, meantime, had monitors who consistently and painstakingly pointed out the project's problems — in public. Ultimately, Vogtle's story shows how money and political power triumphed over incompetence, at least so far.
SCANA's headquarters is near Columbia, but that hasn’t stopped its top executives from suppo…
The Vogtle nuclear complex is roughly halfway between Allendale and Augusta, just off a two-lane road that roughly follows the Savannah River. Amid the area’s rolling hills are a scattering of modest homes, dozens of RV parks for workers and two convenience stores. A prodigious amount of roadkill is a testament to its remote location and heavy construction traffic.
Southern Company’s subsidiary, Georgia Power, began work here in 1974 on two nuclear reactors, Vogtle 1 and 2. The company named them after Alvin W. Vogtle, a former chairman and president, who among other things was a World War II prisoner of war. The feisty Vogtle tried to break out four times, succeeding on his fifth. His exploits inspired Steve McQueen’s character in the movie "The Great Escape."
Georgia Power’s relationship with nuclear power isn’t so different than its persistent former chairman. In 1979, while Vogtle 1 and 2 units were still under construction, Pennsylvania’s Three Mile Island plant had a near meltdown. Public support for nuclear power cooled, and chilled even more after Russia's Chernobyl blast in 1986. But Georgia Power kept pushing forward. Vogtle 1 finally went online in 1987, and Unit 2 in 1989.
By then, America's nuclear construction industry had begun a two-decade hibernation. Burned by high costs and numerous failures, energy producers moved toward coal and natural gas.
But in the early 2000s, Georgia Power and other utilities were ready to try again. In 2003, a little-known group, NuStart Energy, formed to usher in a new era of nuclear power in the United States. The group included Southern Company, SCANA and nine other utilities, mostly in the South. Joining them were Westinghouse and General Electric, each with a new reactor design. They stood to make tens of billions of dollars if this nuclear renaissance materialized.
The power of Georgia Power
Things would be different this time, Westinghouse promised then and still does today. Westinghouse had a new reactor design, the AP1000. It incorporated the latest technology. Old reactors use pumps to shower water onto overheating reactors, but the AP1000 relied on a nearly 800,000-gallon container of water above the reactor. In an emergency, water would pour onto the reactor and prevent a meltdown.
And new plants would be constructed differently, Westinghouse advertised. Instead of doing nearly all work onsite, key components would be fabricated off site at dedicated factories. These modules would then be shipped to work sites and assembled like giant Legos. This approach would cut costs and improve quality, especially if Westinghouse produced reactors in large numbers as the industry hoped.
Utilities and their lobbyists went to work. In the mid 2000s, they prodded state legislatures to pass pro-nuclear laws. These new laws, including South Carolina's Base Load Review Act, generally shifted financial risks of new reactors from utilities to ratepayers.
The industry’s campaign was particularly aggressive in Georgia. Energy-related PACs and lobbyists poured money into campaign coffers of lawmakers and utility regulators alike.
Unlike South Carolina, where lawmakers appoint commissioners, Georgia’s commissioners are elected. Campaign donations even crossed state lines, with SCANA executives chipping in at least $53,000 since 2006, according to a compilation by the Energy and Policy Institute, a watchdog group. All told, lobbyists and utility players pumped nearly $2 million into commissioners' campaigns over the past decade.
Georgia Power “has deep tentacles and deep relationships" at all levels of government, said Glenn Richardson, Georgia's House Speaker from 2004 to 2010, the first Republican since Reconstruction to hold the post. He said Georgia Power regularly showered communities with donations, accumulating goodwill and favors. It had a deep stable of lobbyists. Richardson said he was amazed at how the utility could advance its legislative interests quickly, often without leaving fingerprints.
Yet, he added, Georgia Power and its allies made solid cases that they needed new nuclear reactors. Coal was in decline; natural gas prices were still high in the mid-2000s; solar and wind weren’t yet competitive. "And, you have to remember that in 2004, '05 and '06, Georgia had exponential growth,” he said. “We were on fire, and we didn’t think we would have enough electricity for everyone moving here.”
Amid this legislative push, on April 9, 2008, a consortium led by Georgia Power made a deal with Westinghouse to build two new AP1000 reactors at Vogtle.
The next month, SCANA and Santee Cooper made a similar deal for V.C. Summer near the small town of Jenkinsville.
The race to build the new generation of nuclear reactors had begun.
Constructing a plant to safely split atoms is a remarkably complex endeavor, one that requires extensive engineering know-how and documentation. So, in 2009, Georgia’s Public Service Commission set aside $600,000 a year to hire expert construction monitors. Georgia Power agreed to foot the bill. The commission then hired William Jacobs to lead the monitoring team.
Jacobs had a lengthy resume: He graduated from Georgia Tech with a Ph.D. in nuclear engineering. He worked for a Florida engineering company and on nuclear projects in Korea. In 1979, he landed a job with Westinghouse and managed nuclear plants in the Philippines and Yugoslavia. In the late 1980s, he became a sought-after consultant, offering testimony about nuclear issues in at least 10 states, including South Carolina.
South Carolina regulators tried to hire Jacobs to monitor the V.C. Summer project but lost out to Georgia, said Nanette Edwards, deputy executive director of South Carolina's Office of Regulatory Staff.
On the surface, Georgia's monitoring plan had potential conflicts of interest, given that Georgia Power was effectively paying the monitoring team's expenses and Jacobs' past employment with Westinghouse. But Jacobs knew that a nuclear renaissance wouldn't happen unless Westinghouse built Vogtle on time and on budget.
So, as construction picked up in 2012, Jacobs and his team aggressively identified roadblocks — ones that would haunt both the Georgia and South Carolina projects in the coming years. In public hearings that year, Jacobs warned that Westinghouse had no firm schedule that integrated the many tasks needed to complete the reactors. Instead, Westinghouse managed the project with a "six-month lookahead schedule."
It was a stunning revelation; the absence of a firm schedule was particularly critical given the project's modular construction. Delays in one module could ripple through the entire project. And Jacobs highlighted major quality-control problems at off-site factories. He cited safety problems in Louisiana uncovered by the Nuclear Regulatory Commission. Welders and workers there didn't have the expertise to build nuclear components, much less document what they were doing. He testified that basic paperwork lacked signatures and contained illegible notes. Documentation was in such disarray that sorting it out would take longer than building a module from scratch.
Work at the Vogtle site itself also wasn't going well; early concrete pours weren't done properly, he told commissioners. Workers had to redo rebar because it wasn't done to code. During a 2012 hearing, he said that Westinghouse's performance was unsatisfactory — so bad that he urged Georgia regulators to consider a surprising scenario: the project, though barely off the ground, already could be as much as four years behind schedule.
Different state, different monitor
In 2011, South Carolina's Office of Regulatory Staff also hired a construction monitor, another nuclear industry insider named Gary Jones.
Like Jacobs, Jones had an impressive resume. A senior vice president and owner of Sargent & Lundy, a large Chicago construction consulting company, he worked on nuclear projects in China and Korea and several in the United States.
Unlike Jacobs, Jones painted a much rosier portrait when he testified about the project's status in 2012.
He told the S.C. Public Service Commission that V.C. Summer project hadn't produced a detailed project schedule, but that he expected one soon.
At the time, SCANA wanted to push the completion date seven months forward. Jones warned commissioners this timetable was “aggressive and ambitious” and noted problems with module fabrication and quality control issues. But he concluded with a recommendation that regulators accept South Carolina Electric & Gas's aggressive new completion schedule — and that the state approve SCE&G's request to increase the cost of the project by $131 million.
He wouldn't testify publicly for another four years.
Both projects fall behind
By 2016, Jacobs and his colleagues had a long history of identifying and making public major problems at the Vogtle site.
Time and again, he and his colleagues found that Westinghouse consistently failed to produce a detailed construction schedule, depending instead on short-term "look-aheads."
Over and over he brought up that Westinghouse had yet to finalize engineering drawings. He told Georgia commissioners about his visit to Westinghouse’s AP1000 reactor project in China. His biggest impression from that trip was how far workers at Vogtle had to go.
He testified roughly every six months. Information about his findings was posted on the Georgia Public Service Commission website, as well as the questions his team posed to Georgia Power. These public hearings also gave the project’s opponents chances to cross examine Georgia Power officials. Armed with Jacobs’ findings, a lawyer for the Southern Alliance for Clean Energy grilled a Georgia Power official earlier this year about the project's slow pace.
The official acknowledged that a consultant had examined productivity and found workers spent more time doing "non-work-related activities" than actual work. Progress was so slow that between April 2016 and April 2017, the Vogtle project fell behind 325 days, or "almost a day-for-day slippage," the Southern Alliance for Clean Energy noted in a court filing.
Vogtle’s twin in South Carolina had similar productivity issues and delays. But the V.C. Summer project's problems were often papered over by SCANA and Santee Cooper officials. On Sept. 21, 2016, SCANA and Santee Cooper held a "media day" at the plant where executives assured reporters that the project had faced some challenges but was on track.
"People ask, ‘If you could do it again, would you make the same decision?’" SCANA Chief Executive Officer Kevin Marsh told reporters. "Absolutely, I would make the same decision. I feel as strongly today — probably even stronger today than I did back in 2008 — that this is the solution for us, for a clean energy future."
Behind closed doors, however, SCANA and Santee Cooper officials had received a scathing report from a consultant, Bechtel, a large civil engineering company. Kept secret from investors and the public, the Bechtel audit highlighted many problems that Jacobs and his team in Georgia had talked about publicly for years.
South Carolina’s Office of Regulatory Staff has paid Jones, its construction monitor, an average of $122,000 a year since 2012 to keep track of work at V.C. Summer. But Jones reportedly didn’t learn about the Bechtel report until this summer when it was referenced during a Senate hearing and posted on The Post and Courier’s website, said Edwards of the Office of Regulatory Staff.
Jones had visited the V.C. Summer site monthly since 2011 and provided the Office of Regulatory Staff regular reports, ORS officials told The Post and Courier. But he testified publicly just twice, once in 2012 and again in 2016.
"We feel very good about his testimony in 2016," Edwards said.
Jones' 2016 testimony wasn't as rosy as his comments four years before, but it still lacked the detail and sense of urgency of Jacobs’ work in Georgia. Jones testified about the project's "significant progress," especially now that Westinghouse had brought in Fluor, an experienced construction company, to sort out the project's longstanding problems. But he added that he was skeptical about Westinghouse's ability to complete the project on time.
"Well, I'll be perfectly candid," Jones told state regulators in 2016. "I don't think that the project is going to hit their specific completion dates."
Jones did not respond directly to recent requests for comment, but in an email through the Office of Regulatory Staff, he said Westinghouse had a schedule that changed often because of delays. He said that SCE&G and Westinghouse couldn’t agree on a long-term labor and construction schedule in 2013, and that “the project was managed on the basis of detailed three-month look-ahead schedules” after that. As the months passed, ORS never gained access to a long-term schedule, he said.
By early March, the problems with South Carolina’s project couldn’t be hidden anymore. At a meeting in New York, Westinghouse officials told SCANA and Santee Cooper that it still didn't have a detailed construction schedule.
Lonnie Carter, Santee Cooper’s CEO, later wrote a letter calling the news “devastating.” Devastating perhaps, but given Jacobs’ public testimony about Vogtle's schedule issues, it shouldn’t have been surprising.
Spreading the pain
Stan Wise, chairman of Georgia Public Service Commission, watched with interest as SCANA and Santee Cooper wrestled with their decision to shut down the V.C. Summer project. SCANA and Santee Cooper and their ratepayers had sunk $9 billion into the South Carolina project, more than the state's annual budget. Westinghouse had bought more than 90 percent of the supplies for the plant but was less than a third of the way through actual construction. Estimates about the final price tag topped $25 billion.
When SCANA and Santee Cooper finally pulled the plug July 31, Wise said to himself: “We’re the last one standing.”
Georgia Power’s consortium and Georgia regulators also had a decision to make. As with V.C. Summer, only about 30 percent of Vogtle had been built.
“There was some real gnashing of teeth in Georgia to go or not go,” Wise said. But in the end, the Georgia consortium replaced Westinghouse with Bechtel as its primary contractor and pressed on.
While the Vogtle and V.C. Summer projects were virtually identical, Wise said the utilities behind the projects were notably different, which partly explains why Georgia Power moved forward.
The Georgia nuclear consortium received more money from Toshiba to settle construction problems. Georgia also had loan guarantees from the federal government that cut future financing costs. SCANA and Santee Cooper had decided against such guarantees.
Moreover, Georgia Power and its parent, the Southern Company, was much larger than SCANA, and could spread the project’s cost over a larger base of ratepayers, Wise said.
Georgia Power serves 2.5 million customers versus SCANA's 717,000. In South Carolina, roughly 18 cents per dollar on an SCE&G bill goes toward the nuclear project. Because of Georgia Power’s larger customer base, it’s just 5 cents per dollar for its customers.
Wise called the difference in ratepayer risks “remarkable.” The 18 percent charge on SCE&G electric bills “will have a terrible impact on South Carolina residents and businesses for decades to come," he said.
"We're better off today with it going forward," he added, "In South Carolina you have a finger pointing campaign about who knew what and when and who’s going to pay for it all. No good comes out of any of those scenarios.”
Monday was the first day that Bechtel was officially in charge of construction at the Vogtle site.
“They can’t point fingers anymore at Westinghouse,” Wise said. “It’s theirs.”
It was an inauspicious beginning for Bechtel. The day's rainstorm drenched the worksite, and a few departing workers said they were let off early. They left during the afternoon shift change. And the result was like a parking lot after a major sports event: a massive rush to get out.
With the new cooling towers getting soaked by the storm, the huge, transient workforce filed out of two gates. From Kentucky and Alabama, they turned onto River Road, a few stopping at convenience stores to pick up beers. From Florida and South Carolina, they sped on country roads, turning into the many RV parks that have popped up like toadstools around the plant. Thousands of workers on the move, the last ones standing.
Reach Tony Bartelme at 843-937-5554. Follow him on Twitter @tbartelme.