The repair and restart of TVA’s oldest nuclear reactor cost $90 million more than what the agency budgeted, but the federal utility will still pay the primary contractors on the project an extra $42 million in bonuses and other fees, TVA officials said Monday.
TVA directors last week voted to pay Bechtel Power Corp. and Stone and Webster Construction Inc. $15.5 million each, plus another $11.3 million in fees, to settle a legal dispute with the contractors over “team incentive payments” for their nuclear work in Alabama from 2002 to 2007.
Bechtel was the engineering contractor and Stone and Webster was the construction contractor for the five-year project to restart the Unit 1 reactor at the Browns Ferry Nuclear Power Plant, which was restarted after a 22-year outage.
The contractors initially said they were due $76 million in performance bonuses for their work at Browns Ferry, in addition to their original payments as part of the $1.8 billion restart project. TVA initially said the contractors were due only $24 million in bonuses, but the $42 million was reached through mediation and “is a fair settlement,” TVA Senior Vice President Ashok Bhatnagar told the TVA board last week.
The Browns Ferry reactor was repaired on time and restarted in May 2007. But the cost of the repair ended up being $90 million more than TVA originally forecast.
Last year during the first six months of the Unit 1 restart, the reactor had five unplanned shutdowns, which caused the Nuclear Regulatory Commission to assign extra staff to assess the condition of the restarted reactor.
Louise Gorenflo, a leader in the anti-nuclear group known as the Bellefonte Efficiency and Sustainability Team, on Monday questioned the payment of bonuses to contractors whose work was overbudget and may have helped lead to an unusually high number of outages last year.
“Certainly, the nuclear trough they are feeding in is deep and wide,” she said. “It really doesn’t make sense for TVA to be paying out bonuses when it doesn’t look like they gave TVA quality work.”
But the Unit 1 reactor at Browns Ferry has operated much better during 2008 and has had no unplanned outages since last fall, although the unit was idled to repair problems on the nonnuclear side of the plant, TVA officials said.
During last week’s TVA board meeting, TVA Chairman Bill Sansom said the restart of Browns Ferry Unit 1 has proven to be a better deal than TVA originally projected when the board voted in 2002 to reactivate the unit.
At the time, TVA estimated the benefits of the power generated from the reactor would pay for the cost of its repair in six to eight years. But with the cost of other power generation from coal and natural gas up significantly, Mr. Sansom said TVA should pay off for its investment in Browns Ferry in about two and a half years.
“Browns Ferry has proven to be a very good investment for TVA,” he said.