Contractor wasted millions on unnecessary supplies for s.c.’s failed nuclear reactors news postandcourier.com gas finder app

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EDITOR’S NOTE: This story has been changed to reflect new information that came to light since its publication. The original story incorrectly stated the price of thousands of nuts sold by Dubose National Energy Services to Westinghouse Electric. Documents reviewed by The Post and Courier show that Westinghouse tried on two occasions to purchase nuts priced at $114 each, but Dubose demonstrated to the company that a less expensive alternative would be more effective.

COLUMBIA — Westinghouse Electric squandered millions of dollars on unnecessary supplies in its failed attempt to build two nuclear reactors in South Carolina, and buyers for the company twice tried to buy tens of thousands of hand-machined nuts that cost $114 apiece when a sturdier alternative was available for pennies, a Post and Courier investigation found.

Internal cost analyses and interviews with four engineers who worked on the project highlight how poorly vetted designs, questionable purchasing decisions and improperly stored materials contributed to millions of dollars in needless spending by Westinghouse, the project’s primary contractor.

The nut purchase was ultimately shut down before millions more went to waste on a pricey part the plant didn’t need. But that’s just one small element of a massive project where vast piles of equipment and parts still lie unused, exposed to the elements and rusting away.

Those costs could be passed on to millions of SCANA and Santee Cooper customers in the coming decades. SCANA’s more than 700,000 electric customers already pay $37 million a month, or 18 percent of their bill, for the $9 billion unfinished reactors.

Westinghouse declined to comment for this story. Santee Cooper said the public utility was unaware of the nuts or other questionable purchases. SCANA said it would address any issues with the failed construction project through pending court cases and hearings in front of South Carolina’s utility regulators.

More than 5,000 workers streamed from V.C. Summer Nuclear Station when the project was canceled in late July. Welders dropped equipment where they stood. Workers discarded their security passes. Abandoned trucks idled at the gate to the sprawling construction site.

A project that promised to ignite a nuclear renaissance in the United States ended with only a third of the reactors built. More than 90 percent of the parts and materials, however, lay in tents, fields and garages on the sprawling Fairfield County property. Other supplies were stored in off-site warehouses.

Half-inch nuts can be found at any local hardware store. They’re roughly the size of a nickel and cost a couple bucks or less. But Westinghouse twice tried to pay $114 apiece for hand-machined nuts to lock various pieces of equipment in place. Few suppliers in the United States produced that type of nut.

A more effective alternative was available for a small fraction of that cost, according to documents reviewed by The Post and Courier. But inexperienced designers in Pittsburgh and Charlotte specified the $114 part in construction plans without recognizing the cost, engineers said.

Workers ordering the materials didn’t question why one part was ordered over another. They just paid the suppliers. Construction workers had little reason to worry about the cost. They simply knew how many parts they needed on a given day, engineers and other former Westinghouse employees said.

Westinghouse would not disclose how many of the costly nuts were purchased for the Summer project and another reactor expansion it was undertaking at Plant Vogtle near Augusta. The manufacturing company, Dubose National Energy Services, declined to comment on its dealings with clients.

But documents reviewed by The Post and Courier show Dubose demonstrated to Westinghouse that a planned 2013 order for about 192,000 of the $114 nuts was overly expensive and unnecessary. Instead, Dubose sold the company nuts that went for 12 cents apiece. A Westinghouse buyer apparently missed that earlier transaction and placed another order for the pricey $114 nuts in 2016, only to have Dubose step in again and convince the company a cheaper alternative was better, documents show.

Westinghouse made 15 cents on every dollar for materials, according to the original 2008 construction contract. The more it spent, the more it made. That didn’t change until the Pennsylvania-based company agreed in 2016 to finish the nuclear reactors for a fixed price.

In the case of the half-inch nuts, for instance, the dramatic price difference expanded Westinghouse’s profit margins exponentially. The company stood to pocket $17,100 by buying a thousand nuts for $114 a piece. It only made $18 for the same number of parts at 12 cents.

Westinghouse’s new reactor design, the AP1000, represented a new generation of safer and cheaper nuclear reactors. But Westinghouse had never built one before. Engineers said the company had little grasp of how many pumps, valves or rolls of electrical wiring were needed to finish the reactors. They had only a rough idea of when supplies would be put to use.