Westinghouse, Shaw sue over additional nuclear construction costs

Westinghouse and a subsidiary of The Shaw Group (NYSE: SHAW) are suing Georgia Power, a unit of Southern Co. (NYSE: SO), and co-owners of the Vogtle nuclear power plant for breach of contract due to additional construction expenses, according to The Atlanta Journal-Constitution.

The companies are suing for an amount originally set at $58 million, and the lawsuit says Georgia Power have paid $29.3 million of that, the article said. The two contractors have accused the plant owners of underestimating the amount of suitable soil to backfill two excavation sites for the two new reactors. Backfill is material excavated from a site and reused for filling that must meet standards set by federal nuclear safety regulators, the article said. As a result, Westinghouse and Shaw had to excavate and stockpile additional material and haul it further than planned. Shaw’s unit, Stone & Webster, paid the subcontractors for the additional work and then billed the utilities for that amount, the article said.

A contract between Shaw, Westinghouse and the utilities said that if there is a billing dispute, the owners are required to pay half of the disputed amount, according to the article. The owners also have to tell the contractors within 15 days if the billing is being disputed.

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