Westinghouse, Toshiba's troubled nuclear unit, is acquired

Westinghouse, Toshiba's troubled nuclear unit, is acquired

January 5th, 2018 by Dave Flessner in Business Around the Region

FILE - This Wednesday, March 29, 2017, file photo, shows a sign at the entrance to Westinghouse International Headquarters in Cranberry, Pa. Brookfield Business Partners is buying the Toshiba nuclear unit Westinghouse Electric. Westinghouse filed for bankruptcy protection in March 2017. The transaction is expected to close in the third quarter of 2018. (AP Photo/Keith Srakocic, File)

Photo by Keith Srakocic

Closer to home

The Westinghouse nuclear division operates a boiling water reactor training facility in Chattanooga, which had 88 local employees at the end of 2016. Westinghouse has invested nearly $30 million in the 70,000-square-foot facility in the Center South Industrial Park, which provides training for nuclear operators of nuclear reactors around the globe.

Both of Tennessee’s nuclear power plants also are Westinghouse-designed pressurized water reactors. TVA began power generation of its Sequoyah nuclear plant near Soddy-Daisy in 1981 and its Watts Bar plant near Spring City in 1996.

Westinghouse Electric, the U.S. nuclear unit of embattled Japanese electronics giant Toshiba, has been acquired in a deal valued at about $4.6 billion.

Westinghouse Electric Co. declared bankruptcy protection early last year, leaving a number of nuclear projects in limbo.

The acquisition by Brookfield Business Partners LP on Thursday comes one day after an agreement tying up loose ends from two failed nuclear reactors in South Carolina.

South Carolina Electric & Gas Co. abandoned construction of reactors at the V.C. Summer Nuclear Station. Thousands were left jobless in the wake of the $9 billion failure, which was blamed by owners on the plight of Westinghouse, the lead contractor. A deal proposed Wednesday could mean $1.3 billion in refunds for utility customers affected by the failed project.

The nuclear industry has struggled both because of the tremendous cost of building massive reactors and the accelerating shift to other forms of energy such as natural gas and alternative energy, such as solar. The industry, and Toshiba in particular, has been subjected to tighter regulatory control following the 2011 Fukushima nuclear disaster in northeastern Japan.

Toshiba has been dumping assets to cover for its disastrous immersion into nuclear power, a play it saw once as a safe infrastructure investment, free of the seasonal fluctuations of the power generation industry.

Technology in both fracking, a form of drilling, and alternative energy has upended the power sector.

Westinghouse said Thursday the deal with Brookfield doesn't involve cash, but includes the assumption of a number of pension, environmental and operating obligations.

The agreement, pending the approval of bankruptcy court, is expected to close in the third quarter.

Contact staff writer Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.