Westinghouse to pay over $20 million for failed Summer project

September 2, 2021, 9:30AMNuclear News

Westinghouse Electric Company has entered into a cooperation agreement with the Department of Justice in connection with its role in the failed effort to build two AP1000 reactors at the Summer nuclear plant in Jenkinsville, S.C.

The Summer-3 plant during construction in 2013.

South Carolina companies SCANA (now a part of Dominion Energy) and Santee Cooper spent some $10 billion on the nuclear new-build project before halting construction in 2017 after Westinghouse, the lead contractor, declared bankruptcy.

Under the cooperation agreement, Westinghouse will pay a total of $21.25 million in assistance to low-income ratepayers and will continue its cooperation with the ongoing, multiyear investigation into criminal misconduct surrounding the project. In return, federal authorities have agreed not to press criminal charges against the company.

Currently, federal charges are pending against Carl Churchman, a former Westinghouse manager, and Jeffrey Benjamin, formerly the company’s senior vice president for new plants and major projects.

Specifics: Within 30 days, Westinghouse is to pay an initial $5 million to South Carolina’s Low-Income Home Energy Assistance Program “to help certain ratepayers affected by the project’s failure,” according to an August 30 press release from the U.S. Attorney’s Office for the District of South Carolina. A final payment of $16.25 million is to be paid on or before July 1, 2022.

What they’re saying: “Our office continues to seek justice for the victims of the V.C. Summer project failure,” said acting U.S. attorney M. Rhett DeHart. “Westinghouse’s cooperation is vital to our ongoing efforts to hold accountable the individuals most responsible for this debacle. More than $21 million in new low-income ratepayer relief is a strong sign of our commitment to assist those most affected.”

Cleaning house: The press release notes that since being acquired by Brookfield Business Partners, Westinghouse has removed, reassigned, or retrained senior management; elected new members to the board of directors; restructured and retrained its finance organization; established a global financial controls function; implemented new controls over financial reporting; revised and adopted a global ethics code; elected independent directors for its audit committee; established a corporate controller position; and implemented a new whistleblower program to provide employees with the ability to raise concerns without fear of retaliation.

Westinghouse has also, according to the release, provided more than 3 million pages of documents, data, and correspondence to federal investigators, made employee witnesses available for interviews, and participated in extensive debriefing sessions on the process and facts developed during the course of its internal investigation.

In addition, through its former parent company, Toshiba, Westinghouse has satisfied $2.168 billion in settlement payments related to the Summer project, including $1.032 billion to SCANA, $976 million to Santee Cooper, and $160 million to pay various contractor liens.

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