Westinghouse Files for Bankruptcy Protection

By Editors of Power Engineering

Ending weeks of speculation, Westinghouse Electric Company filed for Chapter 11 bankruptcy protection today, the New York Times reported.

Though parent company Toshiba had promised it would ensure new nuclear development projects undertaken by Westinghouse would continue, including the Virgil C. Summer nuclear station in South Carolina and the Alvin W. Votgle nuclear plant in Georgia, it is not yet clear how the bankruptcy filing would ultimately affect construction of those projects, both of which are three years overdue.

In a media statement, Westinghouse indicated the restructuring was due to financial and construction challenges with its nuclear power plant projects.

“Today, we have taken action to put Westinghouse on a path to resolve our AP1000 financial challenges while protecting our core businesses,” said José Emeterio Gutiérrez, interim president and CEO of Westinghouse. “We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader.”

The New York Times indicated the nuclear construction projects undertaken by Scana Energy and Georgia Power may face new contract terms, lawsuits and losses. Cost estimates for Sumner and Votgle are $1 billion to $1.3 billion higher than budgeted, and could exceed $8 billion.

Experts indicated the bankruptcy might terminate the construction contracts and force Scana and Georgia Power to find another builder. Stan Wise, chairman of the Georgia Public Service Commission, said the utilities developing the Votgle station would need to re-evaluate the project and determine whether it would make sense to continue.

Westinghouse’s media statement indicated it had received $800 million in financing for the reorganization, which would “fund Westinghouse’s core businesses of supporting operating plants, nuclear fuel and components manufacturing and engineering as well as decommissioning, decontamination, remediation and waste management.”

Westinghouse indicated it has reached an agreement with each owner of new nuclear construction projects to continue them during an initial assessment period.

Earlier this month, Westinghouse created a new division, New Projects Business, that would concentrate on delivering its nuclear construction projects as well as services provided by WECTEC, a staffing service for the nuclear energy industry.

The company previously announced it would exit nuclear energy construction due to $6 billion in losses from its nuclear division. Toshiba blamed the loss on an overestimation of projects at CB&I Stone & Webster, which Westinghouse acquired in 2015, and dwindling global demand for nuclear development.

The New York Times noted the move could make nuclear construction more difficult, as GE has scaled back its nuclear operations and Areva is undergoing a major restructuring.

As a result of the Westinghouse writedown, Toshiba expects a net loss of $9.9 billion for the fiscal year ending Friday.

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