Vogtle units 3 & 4 Fourteenth Semi-annual Vogtle Construction Monitoring Report February 2016 • Docket No. 29849 Cf^^UcWT$&T\_[^hTTbPcE^Vc[T"P]S#fW^f^aZTeTahSPhfXcWPU^Rdb^]bPUTchP]S`dP[Xch Vogtle Units 3 and 4 Fourteenth Semi-Annual Construction Monitoring Report Table of Contents Page Executive Summary 3 Responses to Stipulated Questions 5 Unit 3 Nuclear and Turbine Islands As of December 2015 2 EXECUTIVE SUMMARY I. Highlights Georgia Power Company (“Georgia Power”) and Southern Nuclear Operating Company (“SNC”) as agent for Georgia Power (collectively, the “Company”) is fulfilling its commitment to safety and quality. During the reporting period of July 1, 2015 to December 31, 2015 (the “Reporting Period”), approximately 6.1 million work hours were performed safely with no lost time injuries. The Company received no Notices of Violation and remained in favorable standing with the Nuclear Regulatory Commission (“NRC”) as indicated by its green status under the NRC’s Construction Reactor Oversight Process. Georgia Power is requesting verification and approval of $160 million of actual expenditures incurred during the Reporting Period. 14th VCM Expenditures Dollars in Millions EPC Quality Assurance, Compliance and Operations & EPC Scope Change Ad Valorem Tax Transmission Total 14th VCM Expenditures 97 52 8 3 $160 The Major Claims Litigation has been settled, and the EPC Agreement has been substantially improved for the benefit of customers. Project Owners (Georgia Power, Oglethorpe Power Company, Municipal Electric Authority of Georgia, and the City of Dalton) jointly negotiated and concluded a Definitive Settlement Agreement with Westinghouse Electric Company LLC (“Westinghouse”), effective December 31, 2015. This Agreement was separately filed with the Georgia Public Service Commission (the “Commission”) on January 21, 2016. The Agreement was approved by each Owner because it and the Project continue to benefit all of their customers. The Agreement accomplishes the following: 3 o Resolves all litigation, open notices of change, and pending and potential claims between Owners and Westinghouse Electric Company LLC (“Westinghouse”) and CB&I Stone and Webster, Inc; o Enhances the protections provided by the Engineering, Procurement and Construction (“EPC”) Agreement to the Owners and their customers; o Provides that Westinghouse will assume all contractor responsibilities as the single prime contractor (the “Contractor”); and o Authorized Change Orders to reflect the expanded scope of Contractor’s work resulting from changes to site security integration and change in law pertaining to new cyber security requirements. The in-service target dates of June 2019 and June 2020 were reaffirmed in the Definitive Settlement Agreement and remain unchanged since the 12th Vogtle Construction Monitoring (“VCM”) Report. Completing Vogtle Units 3 and 4 remains the best cost option for our customers. The 60+ year Vogtle Units 3 and 4 nuclear facility (“Facility”) represents the best cost option for our customers even without yet considering the value that nuclear adds to the state of Georgia’s future in light of pending environmental regulations. The EPC Agreement continues to protect customers. Our customers continue to be protected by the fixed and firm nature of the EPC Agreement which assigns significant construction cost risks to the Contractor. The assignment of these risks to the Contractor has saved customers hundreds of millions of dollars over a “time and materials” contract. Georgia Power customers are protected, with very limited and specific exceptions, from a large portion of traditional construction cost risks such as Contractor’s increased construction costs including lower production and productivity, increased cost of bulk materials and commodities, and Contractor’s own cost of delays. 4 RESPONSES TO STIPULATED QUESTIONS As agreed in the Stipulation that was incorporated into the Certification Order, Georgia Power responds below to the 15 specified items in the order in which they appear in Section 2(d)(1-15) of the Stipulation. In this 14th VCM Report, and in accordance with the Commission’s Order on the Ninth/Tenth VCM Report (“9th/10th VCM Order”), Georgia Power omitted Items 4, 10 and 13. 1. The reasons for any additional change in the estimated costs of the units since the process began. The Total Construction and Capital Cost of the Facility is forecasted to increase $395 million since the previous reporting period. The $395 million represents the Company’s portion of the settlement agreement, change orders for cyber security driven by regulatory changes in law, and resolution of open notices of change including site security integration as outlined in stipulated question 8. This forecast represents the Company’s estimate of the amount that the Company will spend to complete the Facility and, if approved by the Commission, will be put into rate base when the Facility goes into service. The current cost and forecast reports are provided in Tables 1.1 and 1.1a. The tables reflect the forecasted changes to the capital expenditures. 5 Table 1.1 Vogtle 3&4 Facility Georgia Power Company Cost - Subject to Commission Verification and Approval Project To Date Through Period Ending December 31, 2015 Total Project Capital Certified Cost ($ millions) Project to Date Capital Total Current Forecast ($ millions) Variance ($ millions) Footnote Forecast To Date (4) ($ millions) Actual To Date ($ millions) Variance ($ millions) Footnote Construction & Capital Cost EPC Base Fixed Semi Annual Escalation Indexed Escalation Other Fixed Escalation Total EPC Base 1,978 468 670 3,116 1,976 470 674 3,121 -2 2 4 4 EPC Escalation Fixed Semi Annual Escalation Indexed Escalation Other Fixed Escalation Total EPC Escalation 431 142 108 681 355 117 110 582 -76 -25 2 -99 477 141 -34 37 621 1,489 241 -49 56 1,737 1,012 100 -15 19 1,116 4,418 5,440 0 0 0 Quality Assurance, Compliance and Operations & EPC Scope Change Ad Valorem & Other Fees Test Fuel Offsets Transmission Interconnection Total Construction & Capital Cost 1 1,472 187 668 2,327 1,452 169 662 2,282 -20 -18 -6 -45 195 27 108 330 191 22 106 319 -4 -5 -3 -11 566 64 0 51 681 794 64 0 50 908 228 0 0 -1 227 1,022 3,338 3,509 171 0 6 0 6 2 3 2 4 0 0 6 6 5 6 0 2 5 3 Other Capital Cost Certification & Independent Evaluator Fees Construction Monitor Total Other Capital Cost Vogtle 3&4 Facility Georgia Power Company Financing Cost - Recovered Pursuant to O.C.G.A. 46-2-25 (c.1) Project To Date Through Period Ending December 31, 2015 Total Project Financing Estimated at Certification ($ millions) Project to Date Financing Total Current Forecast ($ millions) Variance ($ millions) 1,545 111 39 2,329 91 18 784 -20 -21 Total Project Schedule Financing 1,695 2,438 Total Capital Cost and Financing 6,113 7,878 Footnote Forecast To Date (4) ($ millions) Actual To Date ($ millions) Variance ($ millions) Project Schedule Financing Return on CWIP in Rate Base AFUDC - Accrued through Dec 2010 Return on Unamortized AFUDC Balance 6 886 91 18 885 91 18 -1 0 0 743 996 995 -1 1,765 4,334 4,504 170 Footnotes: 1. Includes $28 million for EPC Joint Use Buildings (that benefits Vogtle 1&2). These buildings will accommodate employees from Units 1, 2, 3, and 4 providing opportunities for better communication, coordination, and additional synergies. 2. Includes Regulation Changes of $96 million. This includes $4M for the new Training Facility. The training facility will support employees from all four units, as needed, and incorporates the most current improvements in Human Factors Engineering that will allow for improved training techniques and employee performance. 3. Includes $23 million for Transmission that benefits Units 1 and 2. These upgrades, replacements, and new installations in the new and existing switchyards provide additional capacity and improved reliability that benefit all customers served by the Vogtle site. 4. The Forecast to Date includes actual costs through the previously filed report, plus forecasted costs through the Fourteenth VCM Reporting Period. 5. Includes Dues and Fees. Taxes and other fees are paid regardless of whether units are under construction or in operation. 6. The Total Current Forecast for Return on CWIP in Rate Base includes $102 million of AFUDC accrued on CWIP above the original certified cost. 7. Includes $98.9M of Disputed Claims previously in a deferred debit account. Includes $137.1M of Settlement accruals made on 12/31/15. Note: Details may not add to totals due to rounding. 6 7 Table 1.1.a (Trend) Vogtle 3&4 Project Georgia Power Company Cost Forecast - Subject to Commission Verification and Approval Through Period Ending December 31, 2015 Certified Jun 2009 Dec 2009 Cost Forecast Forecast ($ millions) ($ millions) ($ millions) Jun 2010 Forecast ($ millions) Dec 2010 Forecast ($ millions) Jun 2011 Forecast ($ millions) Dec 2011 Forecast ($ millions) Jun 2012 Forecast ($ millions) Dec 2012 Forecast ($ millions) Dec 2013 Forecast ($ millions) Jun 2014 Forecast ($ millions) Dec 2014 Jun 2015 Dec 2015 Forecast Forecast Forecast ($ millions) ($ millions) ($ millions) Construction & Capital Cost EPC Base Fixed Semi Annual Escalation Indexed Escalation Other Fixed Escalation Total EPC Base 1,978 468 670 3,116 1,978 468 670 3,116 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 1,976 470 674 3,121 EPC Escalation Fixed Semi Annual Escalation Indexed Escalation Other Fixed Escalation Total EPC Escalation 431 142 108 681 431 142 108 681 336 142 109 586 336 142 109 587 337 142 109 589 344 119 110 573 343 118 110 572 353 120 111 585 355 117 110 582 355 117 110 582 355 117 110 582 355 117 110 582 355 117 110 582 355 117 110 582 507 111 -34 37 621 507 111 -34 37 621 576 111 -34 37 689 589 111 -34 40 706 582 111 -34 40 699 675 111 -60 40 766 675 111 -60 40 766 727 125 -60 41 833 930 159 -49 56 1,096 930 159 -49 56 1,096 930 159 -49 56 1,096 1,094 241 -49 56 1,342 1,094 241 -49 56 1,342 1,489 241 -49 56 1,737 4,418 4,418 4,395 4,414 4,408 4,460 4,459 4,539 4,799 4,799 4,799 5,045 5,045 5,440 0 5 5 5 4 4 4 4 4 5 6 6 6 6 0 5 5 5 4 4 4 4 4 5 6 6 6 6 Quality Assurance, Compliance and Operations & EPC Scope Change Ad Valorem & Other Fees Test Fuel Offsets Transmission Interconnection Total Construction & Capital Cost Other Capital Cost Construction Monitor Total Other Capital Cost Vogtle 3&4 Facility Georgia Power Company Financing Cost Forecast - Recovered Pursuant to O.C.G.A. 46-2-25 (c.1) Project To Date Through Period Ending December 31, 2015 Estimated at Jun 2009 Dec 2009 Certification Forecast Forecast ($ millions) ($ millions) ($ millions) Jun 2010 Forecast ($ millions) Dec 2010 Forecast ($ millions) Jun 2011 Forecast ($ millions) Dec 2011 Forecast ($ millions) Jun 2012 Forecast ($ millions) Dec 2012 Forecast ($ millions) Dec 2013 Forecast ($ millions) Jun 2014 Forecast ($ millions) Dec 2014 Jun 2015 Dec 2015 Forecast Forecast Forecast ($ millions) ($ millions) ($ millions) Project Schedule Financing Return on CWIP in Rate Base AFUDC - Accrued through Dec 2010 Return on Unamortized AFUDC Balance 1,545 111 39 1,507 97 32 1,505 99 33 1,546 99 33 1,553 91 31 1,524 91 19 1,516 91 19 1,552 91 18 1,942 91 18 1,851 91 18 1,796 91 18 2,364 91 18 2,298 91 18 2,329 * 91 18 Total Project Schedule Financing 1,695 1,636 1,637 1,678 1,675 1,635 1,626 1,662 2,051 1,960 1,905 2,473 2,408 2,438 Total Capital Cost and Financing 6,113 6,054 6,032 6,092 6,083 6,095 6,085 6,201 6,850 6,759 6,704 7,518 7,453 7,878 Notes: No reforecast was filed in June 2013. Details may not add to totals due to rounding. * The Total Current Forecast for Return on CWIP in Rate Base includes $102 million of AFUDC accrued on CWIP above the original certified cost. 7 2. A description of any cooperative actions between other builders of nuclear units in the southeast to address labor, crafts, engineering and management requirements. As reported in previous VCM reports, SNC continues to actively participate as a member of APOG LLC (“APOG”) with other members, Progress Energy Carolinas, Florida Power & Light, Duke Energy, NextEra and South Carolina Electric and Gas Company (“SCE&G”) to support multiple engineering, licensing, quality assurance, operational readiness and training initiatives. To the extent allowed by the EPC Agreement, the Company has also engaged with SCE&G on the peer-to-peer level in each functional area of the oversight organization to ensure alignment and to utilize lessons learned and best practices. For example, SNC and SCE&G often participate in joint quality assurance audits and oversight surveillances of the Contractor. SNC and SCE&G construction personnel share construction lessons learned and best practices. Engineering and licensing personnel from the two companies communicate regularly to ensure alignment on resolution to standard design challenges, and also communicate potential impacts to licensing requirements. Collaboration with the SCE&G Inspections, Tests, Analyses, and Acceptance Criteria (“ITAAC”) team is ongoing and is resulting in identification and sharing of best practices to support implementation of an effective and streamlined ITAAC program. SNC and SCE&G will also collaborate as necessary with regard to the respective cyber security programs being developed and implemented by Contractor. 8 3. An explanation of how the indices used in the EPC contract are tracking. There has been no change in the status of this item since the Eighth VCM Report. 9 4. Omitted per 9th/10th VCM Order. 10 5. The status of the Company’s loan guarantee application at the Department of Energy and to the extent that application is granted, then the Company shall also report on the impact it has or would have on the final expected in-service cost of the units. Available $3.46 Billion Received $2.20 Billion Remaining $1.26 Billion The Department of Energy (“DOE”) Loan Guarantee does not have a material impact on the inservice cost of the units, but it does provide benefits to customers through lower financing costs during construction and for many years beyond. 11 6. Whether the Company is using trust preferred financing and the impact it has or would have on the expected in-service cost of the units. There has been no change in the status of this item since the Sixth VCM Report. 12 7. The extent to which the Company is using short term debt and the impact it has or would have on the expected in-service cost of the units. There has been no change in the status of this item since the Third VCM Report. 13 8. An update of the estimated in-service cost and projected date of commercial operation of both units. The updated in-service Total Construction and Capital Cost forecast is $5.440 billion, which is an increase of $395 million from the previous Reporting Period. Capital Forecast at GPC% (Dollars in Millions) Original Capital Forecast $ 4,418 Changes through VCM 13 627 Currently Filed Capital Forecast $ 5,045 Proposed VCM 14 Changes: EPC Scope Change Settlement Cyber Security Resolution of Open Notices of Change including Site Security Integration Total Proposed Changes for VCM 14 with Settlement 326 46 23 395 Capital Forecast Proposed for VCM 14 $ 5,440 Effective December 31, 2015, the Owners executed a settlement agreement with Westinghouse resolving disputes between the Owners and the Contractor under the EPC Agreement, including the Vogtle Construction Litigation. The Company’s portion of the settlement cost is approximately $350 million, of which approximately $24 million was previously paid by the Company, recognized in Construction Work In Progress, and incorporated in prior VCM filings. In addition, the Company will pay approximately $69 million for change orders to incorporate cyber security and site security integration into the Contractor’s scope of work, and for resolution of open notices of change and pending and potential claims arising from events occurring prior to December 31, 2015. The settlement also reaffirms the current in-service dates for Units 3 and 4 are June 2019 and June 2020, respectively. To achieve the in-service dates, certain mitigation strategies will be embedded into the Integrated Project Schedule (“IPS”). These mitigation strategies include, but are not limited to, the following: Use of approved engineering construction joints to support concrete placements in certain module locations; Combining concrete placements inside installed Shield Building panels to minimize concrete curing times. The practice of combining placements was used prior to installation of the first course Shield Building panels which reduced curing times and reduced schedule durations for construction joint preparation and cleanliness; 14 Re-sequencing of sub-module delivery from vendors to optimize the fabrication and onsite assembly schedule; Installing structures over construction areas, including areas of the Nuclear Island, to protect work activities from inclement weather; Process enhancements related to documentation and work packages; Allocations of resources (i.e., additional craft, equipment) to reflect scope of work; Increasing production capability at key vendor facilities; and Standardization of construction sequence above elevation 100 feet to synergize planning. 15 9. A description of all major sources of changes (both increases and decreases) to the in-service cost and sources of change in commercial operation dates, if any. On October 27, 2015, Westinghouse and the Owners entered into a term sheet setting forth the terms of a settlement agreement to resolve disputes between the Owners and Westinghouse and CB&I Stone and Webster under the EPC Agreement, including the Vogtle Construction Litigation. On January 4, 2016, the Company announced the settlement agreement was finalized, effective December 31, 2015. In addition, on December 31, 2015, Westinghouse acquired Stone & Webster (“S&W”) from Chicago Bridge and Iron Co., N.V. (“CB&I”) to become the prime contractor for the Facility. As a result of the settlement agreement, Amendment 7 to the EPC Agreement was entered into, effective as of December 31, 2015. The settlement resolved the commercial issues facing the Facility allowing for the continued and focused effort on the safe, quality and compliant construction of the Facility. In addition to resolving the Vogtle Construction Litigation, the settlement eliminated current and pending disputes, reaffirmed the current in-service dates, and strengthened protections afforded by the EPC Agreement. These protections incorporated into the EPC Agreement through Amendment 7 include an enhanced dispute resolution process and restrictions on the Contractor’s ability to seek further increases in the contract price by clarifying and limiting the circumstances that constitute a nuclear regulatory change in law. As part of the settlement process, two change orders were executed incorporating cyber security requirements and site security integration into Westinghouse’s scope of work. In connection with the acquisition of S&W from CB&I, Westinghouse is now the prime contractor for the Facility with responsibility for design and construction of the Facility. Having one contractor will increase efficiency moving forward by streamlining resources. The Company will continue to provide proactive oversight of the work performed under the EPC Agreement. Additional information regarding the settlement can be found in the Company’s Application for Review and Approval of the Definitive Settlement Agreement for Plant Vogtle Units 3 and 4 and Amendment 7 to the Engineering, Procurement and Construction Agreement, filed with the Commission on January 21, 2016. 16 10. Omitted per 9th/10th VCM Order. 17 11. The status of all other significant permits and licenses required from other governmental agencies. All other required permits and licenses have been approved or are on track to be approved to meet construction need dates as shown in the Permits Update filed monthly with the Commission. The status for the Reporting Period can be found in the December 2015 Monthly Status Report. 18 12. The status of Engineering, Procurement, Construction and Operational Readiness. A. Engineering Completion of Nuclear Island civil/mechanical design in second quarter 2015 is resulting in reduced Engineering impacts on Construction. Engineering process enhancements are also reducing engineering impacts on construction. o Advanced Constructability Reviews to allow earlier identification and resolution of any design issues. o Improved CAD modeling of rebar installation to allow identification of rebar constructability and Code compliance issues prior to construction. o Incorporation of outstanding design changes into civil drawings to make the drawings more user-friendly to construction. o Co-location of Design Engineering resources with construction. Progress continues to be made on the design of the Turbine Building and Annex Building. o Civil/structural design completed. o Cable tray routing and tray support design completed. o Pipe routing and pipe support design on track to meet construction needs. The Contractor continued activities to complete Instrumentation and Controls (“I&C”) and electrical design. B. Procurement The Company continues its oversight of the fabrication of major equipment at international and domestic vendor locations and directs close attention to challenges associated with design and/or testing to ensure those are adequately resolved before installation. Major equipment delivered during the Reporting Period includes: Unit 4 Steam Generators 4A & 4B; and the Unit 4 Core Makeup Tank. Component Accumulator Tanks Containment Vessel Components Core Makeup Tanks Deaerators Diesel Generators Integrated Head Package* Integrated Head Package Main Step-up Transformers Main Turbine Generator Moisture Separator Reheater Passive Residual Heat Removal Heat Exchanger Passive Residual Heat Removal Heat Exchanger Polar Crane Pressurizer Unit 3&4 3&4 3&4 3&4 3&4 3 4 3&4 3&4 3&4 3 4 3&4 3&4 19 Status On-site On-site On-site On-site On-site In Fabrication On-site On-site On-site On-site Fabrication Complete In Fabrication Support Schedule Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes In Fabrication On-site Yes Yes Yes Reactor Coolant Loop Piping Reactor Coolant Pumps Reactor Vessel Reactor Vessel Internals Reactor Vessel Internals Reserve Auxiliary Transformers Squib Valves Steam Generators 3&4 3&4 3&4 3 4 3&4 3&4 3&4 On-site In Fabrication On-site On-site In Fabrication On-site In Fabrication On-site Yes Yes Yes Yes Yes Yes Yes Yes *Following on-site receipt of the Unit 3 Integrated Head Package (“IHP”), the IHP was returned to sub-vendor Premier to incorporate seismic modifications. The Unit 4 IHP, currently on-site, was modified prior to shipment from Premier. Reactor Coolant Pumps The Contractor successfully resolved the Reactor Coolant Pump’s (“RCP”) bearing and impeller issues during the fourth quarter 2015. Production testing of the Unit 3 RCP 501 was completed in January 2016. o No issues were identified during this testing. o Production testing on Unit 3 RCP 502 is scheduled for the first quarter 2016. Delivery of all four Unit 3 RCPs is on track to meet construction need dates. Squib Valves Margin testing was successfully completed which concludes all testing activities required for commercial grade dedication. Final assembly and delivery is on track to meet construction need dates. Photo 1 – Final Unit 4 Steam Generator arrives at the Site 20 Structural Modules Unit 3 CA03 All CA03 submodules were delivered and upended. o Seam welding continues with 10 of 16 seams completed. All Book II material is expected to be delivered by sub-vendor Specialty Maintenance & Construction, Incorporated (“SMCI”) to the site to meet onsite construction needs. The Contractor began installing vertical leak chases and leak chase piping. Unit 3 Shield Building 105 of 167 panels on-site. (37 of 167 Unit 4 Shield Building panels have also been delivered.) Installed the west-side first course panels in the Unit 3 Nuclear Island. Completed vertical welding on 37 seams. In December, Newport News Industrial (“NNI”) provided a new delivery schedule which meets construction needs for Unit 3. Unit 4 CA01 CA01 assembly began in the Module Assembly Building (“MAB”). 10 of 47 sub-modules on-site. Fabrication continues on 11 CA01 sub-modules. Unit 4 CA20 53 of 72 sub-modules on-site. Continued upending sub-modules. o 15 wall sub-modules upended. Fabrication of the remaining five CA20 wall sub-modules is being expedited at Vigor. Completed 18 seam welds. Continued seam welding. Unit 4 CA05 All eight CA05 sub-modules on-site. Commenced upending sub-modules. Commenced seam welding. On track for installation in Unit 4 Nuclear Island in second Quarter 2016. 21 C. Construction Unit 3 Nuclear Island Significant progress continued during the Reporting Period. o Installed approximately 195 tons of rebar. o Placed approximately 2,522 cubic yards of concrete. Installed rebar and placed concrete from 87 feet 6 inches to 94 feet under Containment Vessel Bottom Head (“CVBH”) on the west side in preparation for installation of Course 01 Shield Building panels. Completed installation of the Course 01 Shield Panels on the west side from elevation 100 feet to 103 feet. Placed concrete inside Course 01 Shield Building panels and under the Containment Vessel Bottom Head to elevation 103 feet. Photo 2 – Concrete in Course 01 Shield Building panels Continued installation of rebar inside containment in preparation for concrete placement to elevation 87 feet 6 inches. A vertical construction joint was installed inside containment to accelerate west side concrete placements to allow the Contractor to accelerate the installation of CA03. Placed concrete to elevation 90 feet 6 inches on the east side of the CVBH. This was accomplished in 3 separate placements. Completed wall 11 placement 3 to elevation 100 feet in the Auxiliary Building. Completed wall 1 (placements 14, 15 and 16) to elevation 100 feet in the Auxiliary Building. Installed CB12 and CB25 structural modules inside containment. 22 Installed multiple mechanical modules inside the Auxiliary Building (KB11, KB12, KB14, KB15 and KB16). Completed multiple concrete floor placements in the Auxiliary Building to elevation 82 feet 6 inches including rooms: 12201, 12202, 12203, 12204, 12205, 12207, 12211, 12212 and 12213. Weld out of CA01 to base plates was completed. Activities continue to weld out attachments to CA01 as progress continues vertically inside containment. Photo 3 – KB16 installed in Unit 3 Nuclear Island Unit 3 Turbine Island Placed 2,400 cubic yards of concrete for the turbine tabletop at elevation 170 feet with no quality issues. This is the last concrete placement required prior to installing the turbine casings. Placed concrete for slabs 4, 5, and 6, which marked the final concrete floor placements at elevation 120 feet. Placed concrete for slabs 3 and 4 at elevation 141 feet for areas associated with critical switchgear ES-3, ES-4, ES-5, and ES-6 tied to Initial Energization. Installed significant equipment including: o Gland Steam Condenser and Exhausters; o Component Cooling Water System Heat Exchangers; o Main Generator Circuit Breaker; o Auxiliary Boiler Steam Separator; o Auxiliary Steam Supply System Deaerator Tank; o Clean Oil Storage Tanks and Waste Oil Tank; and o Service Water System Pumps. Began structural steel installation above the turbine deck to elevation 243 feet. 23 Photo 4 – Turbine Building Table Top Concrete Unit 3 Annex Building Significant progress was made on rebar installation and concrete placement during the Reporting Period. o Placed approximately 283 cubic yards of concrete in Areas 2 and 3, and installed approximately 278 tons of rebar. Area 3 concrete wall placements to elevation 107 feet. Area 2 wall 20 was placed to elevation 117 feet. o Installed approximately 250 tons of structural steel in Areas 1, 2 and 3. Progress on Annex Building activities continues to support Initial Energization. Photo 5 – Annex Building Steel Installation 24 Photo 6 – Internal precast in Unit 3 Cooling Tower Unit 3 Cooling Tower Continued installation of the internal precast structures, fill material, and piping systems with no quality issues. Tracking to complete installation of precast internals during the first quarter of 2016. Unit 4 Nuclear Island Set the first of three containment vessel (“CV”) rings. o Weighing approximately 950 tons, this section of the CV is 50 feet tall and 130 feet in diameter. o The CV is designed to house the reactor coolant system and other related systems. Placed concrete under the CV from elevation 72 feet 6 inches to elevation 82 feet 6 inches. o Third largest concrete placement at the Facility with approximately 4,000 cubic yards of concrete placed. Installed in-containment structural modules CB65 & CB66 (Reactor Coolant Drain Tank). Placed approximately 700 cubic yards of concrete inside the Unit 4 CVBH to elevation 76 feet 6 inches. Significant progress on exterior Auxiliary Building walls including completing the south wall to elevation 100 feet. Continued activities in preparation for interior concrete wall placements. Lessons learned incorporated from Unit 3 include Shield Building rebar alignment, InContainment wall thickness, and Auxiliary Building construction joints and sequence. Photo 7 – CV lower ring installed in Unit 4 25 Unit 4 Turbine Island Continued vertical construction. o Placed approximately 3,164 cubic yards of concrete. o Installed approximately 954 tons of rebar. o Assembled approximately 837 tons of structural steel. Installed the CH82 (18 line) and CH81C structural steel modules. Installed the Condenser C lower shell. o Weighs approximately 717 tons. Installed the Condenser A and B upper shells. Placed concrete for slabs 1 and 2 to elevation 100 feet. Placed turbine first bay concrete to elevation 100 feet. o Approximately 1,550 cubic yards of concrete. Installed significant equipment including: o Auxiliary Boiler Makeup Pumps; o Auxiliary Boiler Blowdown Tanks; o Auxiliary Boiler Feed Pumps; o MSR Shell Drain Pumps; o Turbine Closed Cooling Water Pumps; and o Startup Feedwater Pumps. Commenced sequence 7 steel assembly for the exterior portions of the turbine building. Photo 8 – Structural steel installation on Unit 4 Turbine Island 26 Unit 4 Cooling Tower Completed veil concrete placements to approximately 316 feet of 600 feet. Tracking to complete the cooling tower veil in second quarter of 2016. Photo 9 – Unit 4 Cooling Tower Balance of Plant SNC took ownership of and transitioned personnel into the Engineering and Administrative Building (Building 302) and the Maintenance Building (Building 303) after taking ownership from the Contractor. Substantially completed construction on the Receiving Warehouse (Building 306) and the Warehouse (Building 307). Began construction on the Personnel Access Point (Building 304) by placing concrete slab and setting bullet resistant enclosure pods. Set both Unit 3 Reserve Auxiliary Transformers (“RATs”) to support Initial Energization. Transmission/Switchyard Successfully completed work activities on schedule without impacting Vogtle Units 1 and 2. Completed construction of the Unit 3 230kV output breaker bay at the Vogtle Units 1 and 2 switchyard and constructed the east end of the Unit 3 230kV output line into the Vogtle Units 1 and 2 switchyard. Completed all 230kV line modifications at Vogtle 1 and 2. Replaced almost 14 miles of overhead ground wires on 5-230kV lines for increase fault current capability. 27 Achieved significant progress on the Vogtle Unit 4 500kV high voltage switchyard with installation of all breakers, switches, bus support columns and insulators, and most control cable. Georgia Power started physical construction of the Unit 3 low-voltage switchyard. Photo 10 – 500 kV Switchyard Licensing The Company received several amendments to the Combined Operating License from the NRC that support the construction activities. o NRC approved the Company’s LAR-15-009 (License Amendment Request (“LAR”) 110) requesting use of the year 2000 welding code (American Welding Society (“AWS”) D1.1-2000) in lieu of the year 1992 welding code (AWS D1.1-1992). o NRC approved the Company’s LAR-15-010 (LAR 111) which confirms acceptability of C2.C3J coupler welds in multiple locations throughout the Nuclear Island including major modules and some Shield Building panels. o NRC approved Company LAR-15-015 (LAR 117) which requested changes to the thickness tolerances of walls surrounding the reactor cavity, including changes to the associated ITAAC. The changes were incorporated into the Vogtle Updated Final Safety Analysis Report removing the hold on placing concrete in the containment vessel to elevation 87 feet 6 inches. o The Company submitted LAR-15-021 to the NRC requesting changes to the design of auxiliary building Wall 11 and other changes to the licensing basis for use of seismic Category II structures. 28 D. Operational Readiness Building the Operational Readiness Organization The Operational Readiness organization continues to manage resources by using personnel for augmented construction compliance oversight and start-up activities, in addition to continuing required operational readiness activities. o This increases knowledge about the Facility’s construction and installed components that will provide benefits during future O&M activities. The Company requested NRC approval of the Commission Approved Simulator (“CAS”) to support the operator training schedule and first AP1000 NRC operator licensing exam planned for April 2016. o Based on NRC feedback, Initial Licensing Classes (“ILT”) 1 and 2 resumed in January 2016. o A delay in NRC approval could impact the April 2016 operator exam date. The Chemistry, Engineering and Maintenance training programs are in progress and continue to support operational readiness activities. Digital Instrumentation and Controls NRC conducted three inspections in the last half of 2015: o Inspection of the Protection and Safety Monitoring System (“PMS”) resulted in no nonconformances or findings; o Inspection of the safety related Component Interface Module (“CIM”) resulted in no non-conformances or potential findings; and o Follow-up inspection of the Integrated System Validation (“ISV”) resolution process resulted in no non-conformances or finding being identified during the inspection exit meeting. Continued factory acceptance testing of digital control systems equipment. Nearly all of the digital instrumentation and controls equipment has been shipped to the site. PMS is the remaining major equipment set to be shipped and is expected in mid-2016. Cyber Security The Contractor was engaged during the third quarter to support Cyber Security Program scope that the Owner’s had elected to perform. This work continued through the end of the year and provides a foundation for remaining scope. The Cyber Security Team continues to work with the NRC to identify opportunities for NRC review and inspection of both the Cyber Security Program development and Contractor scopes of work. As part of the Definitive Settlement Agreement with the Contractor, the design and implementation of the Cyber Security monitoring system (“CYS”), as well as the assessment 29 and application of Cyber Security Controls on Critical Digital Assets has been incorporated into the Contractor’s scope. Going forward the Cyber Security Team’s efforts will focus on oversight of the Contractor, review and approval of Contractor deliverables through the Vogtle 3 and 4 Cyber Security Assessment Team (“CSAT”), and implementation of the Cyber Security Program. Programs, Processes, and Procedures The Company has developed an integrated operational readiness schedule that contains over 50,000 activities representing training, program development, and procedure development. o 36 programs have been approved by the Plant Review Board (“PRB”). o Engineering Program Administrative procedures are approved. Several Engineering Program Implementation procedures are waiting on as built information. o Completed the Initial Maintenance Rule functions and classification of all station components. o Completed the Equipment Reliability classification and preventative maintenance strategies for all station systems. o The configuration management software that aids the design authority transition was placed into service and plant information is being entered. Testing, Turnover, and Start-up Maintenance and training personnel completed the Initial Test Program (“ITP”) Support Qualifications. Auxiliary Pumphouse (Building 315) initiative progressing with a turnover from construction to testing expected near mid-year. o Acceptance/turnover readiness review challenges occurring to ensure procedures and processes are in place to execute. The ITP Administration Manual was completed in November. The manual is a collection of procedures that govern how the testing will be implemented on the project and will be the first ITP related site inspection conducted by the NRC late in 2016. Integrate the Four Unit Site Submitted common fleet emergency plan with a Vogtle 3 and 4 annex to the NRC in late 2015. Development of common emergency response organization training material continued through 2015. As part of the Definitive Settlement Agreement with the Contractor, the design and implementation of a fully functioning, integrated, plant-wide security system for Vogtle Units 1 through 4 has been incorporated into the Contractor’s scope of work. 30 13. Omitted per 9/10 VCM Order. 31 14. An updated comparison of the economics of the certified project to other capacity options. The economic analysis performed for this 14th VCM Report has relied on the methodologies used in all previous economic evaluations conducted in Docket Nos. 27800 and 29849. The economic evaluation presented in this 14th VCM Report includes updates of all major underlying planning assumptions including fuel forecasts, load forecasts, and new generation technology costs. While lower long-term natural gas price forecasts affect the modeled economic results of the Facility, the lower fuel cost of our existing fleet of natural gas generation also significantly benefits customers today and in the future. The estimate of the capital cost to complete the Facility has been updated from the 13th VCM Report along with pre-in-service O&M, post-in-service O&M, post-in-service ongoing capital additions, nuclear fuel, and spent fuel storage cost. Decommissioning costs, the assumed operating characteristics of the Facility and the long-term marginal financing rates for debt and preferred stock have not changed. The analysis demonstrates that completing the Facility remains the best cost option for our customers. The analyses provided do not include any potential cancellation fees or any fully-committed construction costs that would not be avoidable in the event the project is cancelled. Since the results reflect significant savings to customers across a wide range of possible future fuel and carbon prices, a cancellation assessment is not warranted at this time. Table 14.1 Relative Savings of the Facility versus CC as of February 26, 2016 “Incremental Cost to Complete” (In 2016 Dollars) (Net present value of lifetime costs of CC minus the Facility) Fuel \ CO2 Existing CO2 Moderate CO2 Substantial CO2 High $3,755,000,000 $4,635,000,000 $5,625,000,000 Moderate $1,736,000,000 $2,688,000,000 $3,868,000,000 Low ($208,000,000) $982,000,000 $2,061,000,000 Positive number means the Facility is less costly than the gas-fired CC alternative. The weighted average expected value of the relative savings for completion of the Facility as compared to the gas-fired CC alternative is $2.8 billion based on the results provided in Table 14.1. 32 Table 14.2 Relative Savings of the Facility versus CC as of February 26, 2016 “Break-Even Cost to Complete” (In 2016 Dollars) (Maximum Cost to Complete the Facility and Remain Economic) Fuel \ CO2 Existing CO2 Moderate CO2 Substantial CO2 High $5,573,000,000 $6,337,000,000 $7,199,000,000 Moderate $3,817,000,000 $4,645,000,000 $5,670,000,000 Low $2,126,000,000 $3,161,000,000 $4,099,000,000 If the value is higher than the current estimated cost to complete of $2.3 billion of in-service and construction financing costs, the Facility benefits customers. On an expected value basis, the Company’s results indicate that the cost to complete the Facility could increase by $2.4 billion over the current estimated cost to complete the Facility before becoming uneconomic. (This value can be derived by averaging the results from the nine scenarios above and then subtracting the current estimated cost to complete). Table 14.3 Relative Savings of the Facility versus CC as of February 26, 2016 June 2021 / June 2022 In-service (24 Month Delay) Scenario “Break-Even Cost to Complete” (In 2016 Dollars) (Maximum Cost to Complete the Facility and Remain Economic) Fuel \ CO2 Existing CO2 Moderate CO2 Substantial CO2 High $5,228,000,000 $5,894,000,000 $6,644,000,000 Moderate $3,647,000,000 $4,368,000,000 $5,254,000,000 Low $2,107,000,000 $3,025,000,000 $3,822,000,000 If the value is higher than this scenario’s estimated cost to complete of $2.9 billion of in-service and construction financing costs, the Facility benefits customers. 33 Table 14.4 Relative Savings of the Facility versus CC as of February 26, 2016 June 2022 / June 2023 In-service (36 Month Delay) Scenario “Break-Even Cost to Complete” (In 2016 Dollars) (Maximum Cost to Complete the Facility and Remain Economic) Fuel \ CO2 Existing CO2 Moderate CO2 Substantial CO2 High $5,402,000,000 $6,047,000,000 $6,767,000,000 Moderate $3,847,000,000 $4,542,000,000 $5,400,000,000 Low $2,316,000,000 $3,214,000,000 $3,974,000,000 If the value is higher than this scenario’s estimated cost to complete of $3.3 billion of in-service and construction financing costs, the Facility benefits customers. Table 14.5 Relative Savings of the Facility versus CC as of February 26, 2016 June 2023 / June 2024 In-service (48 Month Delay) Scenario “Break-Even Cost to Complete” (In 2016 Dollars) (Maximum Cost to Complete the Facility and Remain Economic) Fuel \ CO2 Existing CO2 Moderate CO2 Substantial CO2 High $5,588,000,000 $6,228,000,000 $6,931,000,000 Moderate $4,058,000,000 $4,736,000,000 $5,567,000,000 Low $2,537,000,000 $3,426,000,000 $4,148,000,000 If the value is higher than this scenario’s estimated cost to complete of $3.6 billion of in-service and construction financing costs, the Facility benefits customers. Economic Analysis Conclusion / Summary of Results In summary, the vast majority of the scenario studies indicate that the Facility would remain economic despite the additional costs associated with the delay scenarios. The delay scenarios do not represent the Company’s projection for the ultimate outcome of the project but instead represent the delay scenarios ordered by the Commission in the Eighth VCM proceeding. 34 15. The Company will be under a continuing obligation to supplement its response to PIA Staff DR STF-TN-1-2 by ensuring that the financing data reflected in the schedules attached to that DR response reflect the most current and updated information at the time of each semiannual monitoring report. In addition, the Company will provide the most current information shared with each of the Rating Agencies. Simultaneous with this filing, the Company has filed supplemental PIA Staff DR STF-TN-1-2, and has included in that filing the most current information shared with each of the Rating Agencies. 35 36
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