1 BEFORE THE GEORGIA PUBLIC SERVICE COMMISSION 2 3 4 5 IN THE MATTER OF GEORGIA POWER COMPANY’S SIXTEENTH SEMI-ANNUAL VOGTLE CONSTRUCTION MONITORING REPORT DOCKET NO. 29849 6 PUBLIC DISCLOSURE DIRECT TESTIMONY AND EXHIBITS OF STEVEN D. ROETGER WILLIAM R. JACOBS, JR., PhD. 7 8 ON BEHALF OF THE 9 GEORGIA PUBLIC SERVICE COMMISSION 10 PUBLIC INTEREST ADVOCACY STAFF 11 12 1 JUNE 8, 2017 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 2Table of Contents 3I. INTRODUCTION 2 4II. STATUS OF PROJECT 5III. FUTURE PROJECT RISKS 29 6VI. RECOMMENDATION 7 37 7 8 9Exhibits: 10STF-SR/WRJ-1 Resume of Steven D. Roetger 11STF-SR/WRJ-2 Resume of William R. Jacobs, Jr., Ph.D. 5 6 1 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 I. INTRODUCTION 2 3Q. PLEASE STATE YOUR NAMES, TITLES AND BUSINESS ADDRESSES. 4A. My name is Steven D. Roetger. I am the lead analyst for the Georgia Public 5 Service Commission (“Commission”) on the Semi-annual Vogtle Construction 6 Monitoring Docket 29849. My business address is 244 Washington Street, S.W., 7 Atlanta, Georgia, 30334. My name is William R. Jacobs, Jr., Ph.D. I am an 8 executive consultant with GDS Associates, Inc. My business address is 1850 9 Parkway Place, Suite 800, Marietta, Georgia, 30067. 10 11 Q. MR. ROETGER, PLEASE SUMMARIZE 12 BACKGROUND AND EXPERIENCE. 13 A. I hold a Bachelor of Business Administration degree from Georgia State 14 University. I have been employed by the Georgia Public Service Commission 15 since September of 2008, primarily in the capacity as the team leader for the Plant 16 Vogtle Unit 3 and 4 Project under Docket 29849. Also, I was a member of the 17 Public Interest Advocacy Staff team for the Plant Vogtle Unit 3 and 4 Certification 18 (Docket 27800), and a Commissioner Advisory Staff team member for various 19 other proceedings. Prior to joining the Commission, I held various positions in 20 either an accounting or finance capacity for firms in different industries. My 21 resume is included in Exhibit SR/WRJ-1. 22 5 6 2 YOUR EDUCATIONAL 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1Q. DR. JACOBS, PLEASE SUMMARIZE YOUR EDUCATIONAL 2 BACKGROUND AND EXPERIENCE. 3A. I received a Bachelor of Mechanical Engineering in 1968, a Master of Science in 4 Nuclear Engineering in 1969 and a Ph.D. in Nuclear Engineering in 1971, all 5 from the Georgia Institute of Technology. I am a registered Professional Engineer 6 and a member of the American Nuclear Society. I have more than forty years of 7 experience in the electric power industry including more than twelve years of 8 nuclear power plant construction and start-up experience. I have participated in 9 the construction and start-up of seven nuclear power plants in this country and 10 overseas in management positions including start-up manager and site manager. 11 As a loaned employee to the Institute of Nuclear Power Operations (“INPO”), I 12 participated in the Construction Project Evaluation Program, performed operating 13 plant evaluations and assisted in development of the Outage Management 14 Evaluation Program. 15 participated in rate case and litigation support activities related to power plant 16 construction, operation and decommissioning. I have evaluated nuclear power 17 plant outages at numerous nuclear plants throughout the United States. I served 18 on the management committee during construction of Plum Point Unit 1, a 650 19 Megawatts Electric (“MWe”) coal fired power plant. 20 management committee, I assisted in providing oversight of the Engineering, 21 Procurement and Construction (“EPC”) contractor for this Project. I have assisted 22 the Georgia Public Service Commission as the Independent Construction Monitor 5 6 Since joining GDS Associates, Inc. in 1986, I have 3 As a member of the 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 in providing oversight of the Vogtle 3 and 4 Project since August 2009. My 2 resume is included in Exhibit STF-SR/WRJ-2. 3 4Q. WHOM ARE YOU REPRESENTING IN THIS PROCEEDING? 5A. We are representing the Commission’s Public Interest Advocacy Staff (“Staff”) 6 team in this matter. 7 8Q. MR. ROETGER, WHAT IS YOUR INVOLVEMENT WITH THE VOGTLE 9 3 AND 4 PROJECT? 10A. Since Docket No. 27800, I have been directly involved in the oversight of the 11 Plant Vogtle Unit 3 and 4 Project (“Project”) as lead analyst of the Staff Team. I 12 have closely monitored the Project with Dr. Jacobs since its inception. Among 13 other oversight, along with Dr. Jacobs, I monitor the Project areas that either have 14 realized schedule delay or show a risk of potentially experiencing delay or 15 increased Project cost. I have testified in the Eighth through Fifteenth Semi- 16 Annual Vogtle Construction Monitoring (“VCM”) proceedings. 17 18Q. DR. JACOBS, WHAT IS YOUR INVOLVEMENT WITH THE VOGTLE 3 19 AND 4 PROJECT? 20A. I am the Commission’s Independent Construction Monitor (“CM”) for the Project. 21 My duties are to assist the Staff team in its regulatory oversight of all aspects of 22 the Project and to keep the Commission informed of significant Project issues or 23 changes in the projected cost and schedule as they occur. In addition, I keep the 5 6 4 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 Commission informed of significant challenges to the Project that could impact 2 the Project cost and/or schedule. I have presented testimony in the Plant Vogtle 3 Unit 3 and 4 Certification (Docket 27800) and the First through the Fifteenth 4 Semi-Annual VCM proceedings describing the construction monitoring activities, 5 the status of the Project and any concerns or significant issues. 6 7Q. WHAT IS YOUR ASSIGNMENT IN THIS PROCEEDING? 8 Our assignment is to present the results of the Staff oversight from certification of 9 the Project to the present with emphasis on the time period covered by the 10 Sixteenth Semi-annual VCM Report, July 1, 2016 through December 31, 2016. 11 In this testimony, we present our analysis of the current status of the Project 12 which includes a discussion of the progress since the WEC/Fluor transition, 13 discuss the schedule adherence and quality during the 16 th VCM period and 14 identify new risks for the Project during the transition from WEC to Southern 15 Nuclear Company’s management of the Project. 16 recommendation regarding Georgia Power Company’s (“Company”) request for 17 verification and approval of costs incurred during the period in the amount of 18 $222 million. Finally, we make a 19 20Q. PLEASE DESCRIBE THE CONSTRUCTION MONITORING PROGRAM 21 THAT THE STAFF AND INDEPENDENT CONSTRUCTION MONITOR 22 HAVE IMPLEMENTED TO MONITOR THE CONSTRUCTION OF THE 23 VOGTLE 3 AND 4 PROJECT. 5 6 5 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1A. The Staff Team continues to actively monitor the Project. These activities include 2 monthly meetings between Staff and Company personnel to discuss Project status 3 and regular trips to the Vogtle Project site to observe the Monthly Project Review 4 meeting and to witness firsthand construction activities’ progress. We review the 5 Company’s Weekly Metrics report and submit questions raised by this report to 6 the Company for additional information. The Team has continued its review of 7 the Company’s process for handling Project invoices from Westinghouse 8 (“WEC”) and other Company contractors. This includes review of the Project 9 cost control procedures and sampling of processed invoices. Please refer to the 10 Cook-Jones Testimony for further details. Other activities conducted by the Staff 11 Vogtle Construction Monitoring Team include: 12  Review of Monthly Project status reports issued by the Company; 13  Review of Monthly EPC status reports issued by the Contractor; 14  Review of the Company’s Semi-Annual VCM Reports; 15  Preparation of discovery requests for additional information as needed 16 following review of the monthly status reports, semi-annual 17 construction monitoring reports or meetings with the Company; 18  19 Participation in Nuclear Regulatory Commission (“NRC”) public meetings in person and via conference call as appropriate; 20  Review of public correspondence between the Company and the NRC; 21  Review of correspondence between the Contractor and the Company; 5 6 6 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1  Review of trade articles and journals related to new nuclear power 2 plant development;  3 Witnessing significant construction activities. II. STATUS OF PROJECT 4 5Q. PLEASE DESCRIBE THE PROJECT TRANSITION FROM THE 6 WESTINGHOUSE / CB&I CONSORTIUM TO WESTINGHOUSE AS 7 PRIME CONTRACTOR WITH FLUOR AS THE CONSTRUCTION 8 SUBCONTRACTOR. 9A. As a result of the Definitive Settlement Agreement (“DSA”) resolving the 10 litigation between Westinghouse, CB&I and the Vogtle Project Owners dated 11 December 31, 2015, Westinghouse became the Prime Contractor for the Project 12 with Fluor Corporation taking over as construction subcontractor. As part of the 13 DSA Westinghouse agreed to purchase CB&I’s subsidiary Stone and Webster, 14 which was the Construction Contractor for the Project. 15 16Q. WHAT WERE THE IMPLICATIONS TO WESTINGHOUSE AFTER 17 PURCHASING STONE AND WEBSTER? 18A. As a result of the DSA, there would no longer be a Consortium counter party to 19 the EPC Agreement, and Westinghouse would be the single Prime Contractor. 20 Westinghouse retained the design and engineering functions but also added 21 additional procurement1 and construction management responsibilities to its scope 5 6 7 8 1 Westinghouse’s original scope of work included the procurement of most major components for the Nuclear Steam Supply System (“NSSS”) and some Turbine Building components. Additional 7 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 of work. It also meant that Westinghouse would assume all future liabilities of 2 Stone and Webster which at the time of finalizing the DSA had not been fully 3 quantified. 4 5Q. WHAT FUTURE LIABILITIES IS STAFF REFERRING TO ABOVE? 6A. These liabilities are for the added procurement and construction scope of work. 7 The amount of these liabilities was publicly quantified by Toshiba Corporation on 8 February 14, 20172. Toshiba at that time estimated the increase of the total cost 9 estimate to complete both the Vogtle and V.C. Summer Projects to be $6.1 billion. 10 Their analysis by cost category showed labor cost at $3.7 billion, procurement 11 cost at $1.8 billion, and contingency cost of $600 million. 12 13Q. HOW DID TOSHIBA DEVELOP ITS ESTIMATE TO COMPLETE THE 14 VOGTLE AND V.C. SUMMER PROJECTS? 15A. It is Staff’s understanding that in late 2016, Fluor with WEC oversight was 16 commissioned to develop an Estimate to Complete (“ETC”) for each project. An 17 Estimate to Complete is a dollar calculation of future costs at a point in time for a 18 Project. Industry practice dictates that an ETC and Level 3 IPS be updated and 19 monitored as a project moves through time to completion. 20 5 6 7 8 9 procurement represents the balance of procurement. 2 Toshiba Comments by President & CEO Provisional Outlook for FY 2016 3Q Business Results and FY 2016 Forecast; Outline of Loss in Nuclear Power Business and Countermeasures. 8 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1Q. WHAT WAS FLUOR’S PLAN FOR IMPROVING PROJECT 2 PERFORMANCE? 3A. At the Monthly Project Review meeting on February 25, 2016, Fluor presented its 4 planned Step Change Initiatives that were intended to result in a step change 5 improvement of Project performance. Key actions of the Step Change Initiative 6 included: 7  8 9 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx;  10 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx; 11  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx; 12  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 13 14 xxxxxxxxxxxxxxxx;  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. 15 The Step Change Initiatives were intended to result in a step change improvement 16 in performance within 90 days of January 1, 2016 with construction completion 17 per month reaching 2.3 percent per month by the end of the 16 th VCM period and 18 peaking at 3 percent per month by mid-2017. 19 20Q. PLEASE DISCUSS WHETHER THE PERFORMANCE DURING THE 21 16TH VCM PERIOD MET THESE EXPECTATIONS. 5 6 9 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1A. While there were some positive results of the Step Change Initiative, overall 2 Project performance as measured by monthly percent complete and productivity 3 did not improve during the 16th VCM period. Construction completion per month 4 averaged 1.07 percent per month during the 16th VCM period with a low of 0.6 5 percent per month in September 2016 and a high of 1.9 percent per month in 6 December 2016. Staff notes that the 1.9 percent increase in Construction percent 7 complete from November 2016 to December 2016 was due in part to including 8 work that was completed several years in the past such as the MSE walls and 9 waterproofing. Or stated another way, the Project did not achieve 1.9% 10 construction for work completed in the month of December. During the 16th 11 VCM period Total Project completion averaged 0.7 percent per month with a 12 range from 0.5 percent complete per month to 1.1 percent complete per month. 13 These per month percent completions were marginally better than those achieved 14 during the 15th VCM period but certainly not the 2.3 percent per month forecast 15 by the end of the 16th VCM period and only one-third of the 3 percent per month 16 forecast for mid-2017. 17 18Q. PLEASE DESCRIBE THE RESULTS ACHIEVED ON THE PROJECT 19 DURING THE 16TH VCM PERIOD. 20A. The Step Change Initiative, while improving some functional areas, failed to 21 achieve improvement in production and productivity. 22 numerous areas needing improvement and did make improvements in some areas 23 including simplification of work packages and reorganization of site facilities and 5 6 10 While Fluor identified 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 laydown areas, these improvements had no significant impact on construction 2 percent complete per month or on productivity. In addition, as described in more 3 detail later in this testimony, the Contractor failed to issue a revised fully 4 integrated and resource loaded Integrated Project Schedule (“IPS”) during the 16 th 5 VCM period as proposed in Fluor’s Step Change Initiative. 6 7Q. WITH THE STEP CHANGE INITIATIVE NOT RESULTING IN 8 PERFORMANCE 9 CONTRACTOR AGAIN TRY TO DEVELOP AN IMPROVEMENT PLAN? 10A. Yes. In a second attempt to improve performance, during the 16th VCM period the 11 Contractor developed a detailed Construction Performance Improvement Plan 12 issued in August 2016 and a revised plan in October 2016 following the results of 13 a productivity study described below. The Contractor also added a dedicated 14 Performance Improvement Management team in November 2016 which met daily 15 to manage the implementation of performance improvement initiatives and further 16 drive accountability. The Construction Performance Improvement Plan identified 17 numerous actions to improve productivity of the craft personnel. However, these 18 initiatives again had little effect on productivity or production during and after the 19 16th VCM period. IMPROVEMENT AS INTENDED, DID THE 20 21Q. PLEASE DESCRIBE THE PROJECT ISSUES WITH PRODUCTIVITY IN 22 MORE DETAIL. 5 6 11 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1A. Low productivity has been a continuing issue with the Project, including 2 throughout the 16th VCM period. To address this issue the Contractor 3 commissioned a consultant to determine how craft workers were spending their 4 time in the field. This field study was conducted over a five-week period from 5 August – October 2016 and determined that xxx percent of an average worker’s 6 time was spent on direct work with another xxx percent being work related3. 7 Over XX percent of an average worker’s time was non-work related of which idle 8 time was XXX percent. To improve productivity, the Contractor established the 9 Construction Performance Improvement Plan which contained 108 corrective 10 actions in seven different improvement categories. A second visit by the 11 productivity consultant in February and March 2017 showed some improvement 12 but indicated that idle time, early quits and late starts remained high. 13 14Q. PLEASE GENERALLY DESCRIBE PROJECT PROGRESS DURING THE 15 16TH VCM PERIOD AND THE PROJECT’S ADHERENCE TO THE 16 SCHEDULE AND ACHIEVEMENT OF CRITICAL PATH MILESTONES. 17A. As stated in our testimony in prior VCM periods, the Contractor continued to 18 make progress on non-Nuclear Island activities such as the Turbine Island and 19 related equipment, and plant support structures. 20 components and equipment needed to support the Project schedule are on site or 21 are forecasted to be delivered to meet the required install date. 22 construction has not met the completion rate needed to support the Project 5 6 7 8 3 In addition, most major However, Work related activities include waiting for material, tools, Quality Control to sign off on work, Field Engineer resolution of variances to design, etc. 12 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 schedule and therefore critical path activities continued to slip during the 16 th 2 VCM period and thereafter. 3 discussed in more detail below. Key areas monitored by the Staff and CM are 4 5Q. WHAT PARTICULAR AREAS OF THE PLANT HAS STAFF FOCUSED 6 ITS OVERSIGHT ACTIVITIES ON DURING THIS VCM PERIOD? 7A. Staff has focused its attention primarily on Unit 3, the lead unit. In addition, we 8 also monitored construction on Unit 4 to stay informed with the construction 9 status and to gauge improvement in productivity and applications of lessons 10 learned from Unit 3 construction. In particular, during the 16th VCM period Staff 11 focused on the following areas: 12  Unit 3 Containment; 13  Unit 3 Shield Building; 14  Unit 3 Auxiliary building; 15  Unit 3 Annex building; 16  Building 315 Auxiliary Pumphouse. 17 18Q. WHY HAS STAFF SELECTED THESE AREAS FOR ITS FOCUS? 19A. With the exception of Building 315, these areas are on the critical path or a near 20 critical path leading to fuel load. Staff and the CM agree with the Company that 21 work inside containment is the critical path at this time. We note that the critical 22 path can change as the Project progresses. 5 6 13 Construction inside Unit 3 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 containment leads to testing of the Nuclear Steam Supply System (“NSSS”) 2 including cold hydro test and hot functional test which are on the critical path to 3 fuel load. Close behind is construction of the Shield Building including the 4 tension ring, air inlet baffles and Passive Containment Cooling Water Tank 5 located on top of the Shield Building. Testing of the Passive Cooling System is 6 on the near critical path leading to fuel load. Since the Auxiliary Building walls 7 and floors must be completed to elevation 100’ before construction of the Shield 8 Building can exceed elevation 149’, construction of the Auxiliary Building 9 impacts the Shield Building near critical path. The Unit 3 Annex Building houses 10 electrical equipment needed to support Initial Energization (“IE”) of the plant. 11 The process of IE brings offsite power into the plant to support startup testing of 12 the plant equipment. Consequently, IE is necessary for the Initial Test Program 13 (“ITP”) to begin work in the Turbine Island and Nuclear Island. 14 15 Finally, Staff focused on Building 315, the Auxiliary Pumphouse, which contains 16 the firewater protection and potable water systems. 17 associated systems were selected by the Company and the Contractor to be used 18 as a pilot program to test the procedures and processes that will be used to turn 19 over the plant systems and structures from construction to testing and then to SNC 20 operations. Building 315 provided a good test case for the first building and 21 system turnovers because it contains examples of most of the components and 22 equipment found in the plant including pumps, valves, electrical equipment and 23 digital control systems to be tested by the ITP group. 5 6 14 Building 315 and its 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 2Q. WHICH ITERATION OF THE IPS IS USED AS THE BASELINE TO 3 MEASURE PROGRESS? 4A. The IPS issued by the Contractor in April, 2016 provides the baseline schedule to 5 which the monthly IPS updates are compared. This schedule is referred to as the 6 “Project Schedule”. 7 8Q. PLEASE DESCRIBE THE STATUS OF EACH AREA OF STAFF’S FOCUS 9 BEGINNING WITH WORK INSIDE THE UNIT 3 CONTAINMENT 10 BUILDING. 11A. Construction inside the Unit 3 Containment Building currently consists primarily 12 of installing rebar and embeds and placing concrete at increasing elevations and 13 installation of major NSSS components including the Reactor Vessel, Steam 14 Generators and Pressurizer. A major milestone for rebar and embed installation 15 and placement of concrete inside the Containment Building is achieving elevation 16 107’. This would release work fronts in the Containment Building for installation 17 of pipe hangers, pipe, cable tray and other bulk commodities. 18 placements to achieve elevation 107’ inside the Containment Building have gone 19 slowly during and beyond the 16th VCM period. Concrete 20 21 At the beginning of the 16th VCM period, the July 2016 Senior Management 22 Update (a schedule analysis report prepared by the Company) shows placing the 23 concrete slab at elevation 107’2” on XXXXXXXXXXXX. This date is a 70-day 5 6 15 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 slip from the Project Schedule date of xxxxxxxxxxxxxx. The January 2017 2 Senior Management Update at the end of the 16 th VCM period shows a forecast 3 date for achieving elevation 107’ on xxxxxxxxxx, a 207-day delay from the 4 Project Schedule. 5 137-day slip in schedule for this critical activity during the 6-month 16 th 6 VCM period. For additional perspective on progress in this area, the April 2017 7 Senior Management update forecasts this placement on XXXXXXX, an 8 additional 65-day delay since the end of the 16 th VCM period to achieve 9 elevation 107’ inside Unit 3 Containment. The cumulative delay for this activity is 10 This 207-day variance from the Project schedule represents a 272 days over a one year period (April 2016 – April 2017). 11 12Q. PLEASE DESCRIBE THE STATUS OF WORK ON THE UNIT 3 SHIELD 13 BUILDING. 14A. An analogous milestone to achieving elevation 107’ inside the containment is 15 achieving elevation 149’ on the Shield Building. Above elevation 149’ the Shield 16 Building will consist of Shield Building panels around the entire circumference. 17 Placing the Shield Building panels has gone well up to course 6. However, the 18 wall on the east side of the Shield Building consists of reinforced concrete up to 19 elevation 149’. This portion of the Shield Building wall will be constructed in 19 20 concrete placements. Prior to placing concrete the required rebar, embeds and 21 penetrations must be installed. 22 5 6 16 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 At the beginning of the 16th VCM period, the July 2016 Senior Management 2 Update shows achieving a Shield Building elevation 149’ on XXXXXX. This 3 date is a 96-day delay from the Project Schedule date of XXXXXXXXX. The 4 January 2017 Senior Management Update at the end of the 16 th VCM period 5 shows a forecast date for achieving elevation 149’ of the Shield Building on XXX 6 XXXXXX, a 150-day delay from the Project Schedule. This represents a 54-day 7 slip in schedule for this critical activity during the 6-month 16 th VCM period. 8 For additional perspective on progress in this area, the April 2017 Senior 9 Management update forecasts this placement on XXXXXXXXXXX, an 10 additional 143-day delay since the end of the 16 th VCM period to achieve 11 Shield Building elevation of 149’. The cumulative delay for this activity is 293 12 days over a one year period (April 2016 – April 2017). 13 14Q. PLEASE DESCRIBE THE STATUS OF WORK ON THE UNIT 3 15 AUXILIARY BUILDING. 16A. A key milestone in construction of the Auxiliary Building is to achieve 17 construction of the walls and floors to elevation 100’. For reference, elevation 18 100’ is ground level on the Vogtle Project. Construction of the Auxiliary Building 19 must achieve elevation 100’ before construction of the Shield Building can exceed 20 elevation 149’ to avoid differential settling between these buildings. 21 22 At the beginning of the 16th VCM period, the July 2016 Senior Management 23 Update shows achieving Auxiliary Building walls and floors to elevation 100’ on 5 6 17 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 XXXXXX. This date is a 111-day delay from the Project Schedule date of 2 XXXXXXXXXXX. The January 2017 Senior Management Update at the end of 3 the 16th VCM period shows a forecast date for achieving Auxiliary Building walls 4 and floors to elevation 100’ of XXXXXX, a 307-day delay from the Project 5 Schedule. This represents a 196-day slip in schedule for this critical activity 6 during the 6-month 16th VCM period. For additional perspective on progress in 7 this area, the April 2017 Senior Management update forecasts achieving Auxiliary 8 Buildings walls and floors to elevation 100’ on XXXXXXX, an additional 33- 9 day delay since the end of the 16th VCM period. The cumulative delay for this 10 activity is 340 days over a one year period (April 2016 – April 2017). 11 12Q. PLEASE EXPLAIN WHY THE UNIT 3 ANNEX BUILDING IS 13 IMPORTANT AND DESCRIBE THE STATUS OF WORK. 14A. Completion of the Annex Building is significant because the electrical switchgear 15 and other equipment that provides power to the plant equipment are housed in the 16 Annex Building. Before significant ITP and startup testing of plant systems can 17 be conducted, these systems must be energized through the plant electrical 18 system. 19 Energization. Initial Energization requires that the permanent plant electrical 20 distribution system be installed in the Annex Building. 21 installed in Areas 1 – 3 of the Annex Building. Therefore, completion of Annex 22 Building Areas 1-3 is a significant milestone leading to ITP and startup testing. Powering up the plant electrical system is an activity called Initial 23 5 6 18 This equipment is 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 The July 2016 IPS shows completion of Annex Building Areas 1-3 on XXXXXX 2 XXXXX. This date is a 202-day delay from the Project Schedule date of XXXX 3 XXX4. The January 2017 Senior Management Update at the end of the 16 th VCM 4 period shows a forecast date for completion of Annex Building Areas 1-3 of XXX 5 XXXXX, a 427-day delay from the Project Schedule. This represents a 225-day 6 slip in schedule for this critical activity during the 6-month 16 th VCM period. 7 For additional perspective on progress in this area, the April 2017 Senior 8 Management update forecasts completion of Annex Building Areas 1-3 on XXXX 9 XXX, a 31-day improvement since the end of the 16th VCM period. Completion 10 of the Annex Building Areas 1-3 is one area that has maintained the forecast 11 completion date since the end of the VCM period. However, the cumulative delay 12 for this activity is 396 days over a one year period (April 2016 – April 2017). 13 14Q. PLEASE SUMMARIZE THE SCHEDULE DELAYS ON CRITICAL PATH 15 CONSTRUCTION ACTIVITIES STAFF HAS FOCUSED ON IN THIS 16 TESTIMONY 17 SCHEDULE WAS ISSUED APPROXIMATELY ONE YEAR AGO. 18A. The key critical path construction activities have incurred the following delays 19 since issuance of the Project Baseline Schedule as shown in the April 2017 20 Senior Management Update report: 21  5 6 7 8 9 SINCE THE CURRENT Achieve Unit 3 Containment elevation 107’ 4 PROJECT BASELINE 272 days The July 2016 Senior Management Update does not identify completion of Annex Building Areas 1-3 in the variance analysis report. However, the required dates are shown in the August 2016 Senior Management update. 19 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1  Achieve Unit 3 Shield Building elevation 149’ 293 days 2  Achieve Unit 3 Aux Building to elevation 100’ 340 days 3  Annex Areas 1-3 Construction Complete 396 days 4 That is an average of 325 days of delay for each of these four activities over a one 5 year period. 6 7Q. PLEASE DESCRIBE THE STATUS OF WORK ON BUILDING 315, THE 8 AUXILIARY 9 FOCUSED ITS ATTENTION ON THIS BUILDING. PUMPHOUSE, AND EXPLAIN WHY STAFF HAS 10A. As stated above, the Company and Contractor agreed to use completion of the 11 Auxiliary Pumphouse (Building 315) and its associated systems as a pilot 12 program for the completion, testing and turnover of systems, structures and 13 components from construction to testing and on to SNC operations. Turnover of 14 systems, structures and components from construction to testing and operations is 15 a complicated process and the Company and Contractor needed to verify the 16 procedures and processes that would be used to ultimately turnover the entire 17 plant to the Company’s operations group. Implementation of this pilot program 18 has shown that there existed a significant expectation gap between WEC and SNC 19 on what constituted fully completed systems, structures, and components. Many 20 issues in the construction completion and turnover process have been identified 21 and the level of effort needed to complete and turnover a clean and fully tested 22 system is significant. In addition, testing of the systems has identified issues with 5 6 20 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 the digital control systems along with the observation that commercial grade 2 systems were unnecessarily being constructed and tested to nuclear standards. 3 While this pilot program has been useful, the completion and turnover of Building 4 315 has taken much longer than planned. At the beginning of the 16 th VCM 5 period, the July 2016 Senior Management Update shows Building 315 turnover to 6 Southern Nuclear on XXXXXXXXXXX. As this date began to slip, in the fall of 7 2016 the Contractor committed to turnover Building 315 before the end of 2016. 8 The December 2016 Senior Management Update forecasted turnover of Building 9 315 to occur on XXXXXX. The April 2017 Senior Management Update 10 forecasted turnover to Southern Nuclear on XXXXXX. However, due to issues 11 with digital control systems and the need to re-line the interior of the Potable 12 Water Storage Tank the Company forecast for turnover of Building 315 is now 13 XXXXXXXX or a 289-day schedule slip from the initial turnover date.5 14 15Q. PLEASE SUMMARIZE WEC’S PLAN FOR IMPROVING THE QUALITY 16 AND FIDELITY OF THE PROJECT IPS WHEN FLUOR TOOK OVER AS 17 THE CONSTRUCTION MANAGER SUBCONTRACTOR. 18A. Part of the Step Change Plan mentioned previously included the development of 19 an Integrated Project Schedule that was to be fully resource loaded and logically 20 tied. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 5 6 7 5 0800 Management Update call dated May22,2017 21 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1XXXXX6 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 2 XXXXXXXXXXXXXXXXXXXXXXXXXXX7. 3 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 4 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 5 XXXXXXXXXXXXXXXXXX8. XXXXXXXXXXXXXX 6 7Q. DID WEC ACHIEVE ITS IPS RELEASE DATES AND WERE THE 8 SCHEDULES FULLY RESOURCE LOADED AND LOGICALLY TIED? 9A. No. Based on Staff’s schedule analysis, little improvement was shown in the 10 quality of the IPS during the 15th and 16th VCM periods. Staff analyzed the IPS 11 from the data dates of April 2016 through March 2017. 12 13Q. DID WEC PROJECT MANAGEMENT ACKNOWLEDGE THE POOR 14 QUALITY OF THE LEVEL 3 IPS? 15A. Yes. In October 2016, WEC stated that XXXXXXXXXXXXXXXXXX 9 and an 16 effort was undertaken by WEC to develop a comprehensive ETC to develop a 17 reasonable estimate of cost to complete the Project based on inclusion of all future 18 activities and resource loadings. 19 announcement mentioned above. This effort was the basis for Toshiba’s 20 5 6 7 8 9 10 11 12 6 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX 7 February 18, 2016 Monthly Project Review Meeting Presentation Material Page 21 8 March 16, 2016 Monthly Project Review Meeting Presentation Material Page 23 9 October 19, 2016 Monthly Project Review Meeting Presentation Material Page 13 22 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1Q. WERE SITE PERSONNEL AWARE OF THE IPS DEFICIENCIES? 2A. Yes. At the October 2016 Monthly Project Review Meeting a Contractor site 3 executive stated that XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 4 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX. 5 6Q. WHAT HAS THE PROJECT BEEN USING TO MANAGE THE 7 SCHEDULING OF PROJECT ACTIVITIES IF THE LEVEL 3 IPS WAS 8 UNUSABLE? 9A. Project management reverted back to using eight week look-a-head schedules. 10 11Q. DID STAFF CONDUCT IPS ANALYSES? 12A. Yes. Staff focused on two attributes of a quality schedule that have a direct 13 impact on the ETC. First, Staff reviewed the number of activities remaining to 14 complete the Units that were not resource loaded as of April 2016, June 2016, 15 December 2016 and March 2017. Second, Staff reviewed the total number of 16 activities remaining as of April 2016, June 2016, December 2016 and March 17 2017. The resource loading results are shown in the table below: 18 19 Vogtle 3&4 Total IPS Engineering, Procurement and Construction Activities Resource Loaded by Area Area 5 6 As Of 23 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 Engineering Procurement Construction 4/30/20 16 X% XX% X% 6/30/20 16 X% XX% X% 9/30/20 16 X% XX% XX% 12/30/20 16 X% XX% XX% 4/27/20 17 X% XX% XX% 1 2 3Q. PLEASE PUT INTO CONTEXT THE FIGURES FROM THE ABOVE 4 TABLE. 5A. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 6 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 7 XXXXXXXX. While some improvement occurred during 2016 in Staff’s opinion 8 there was still insufficient detail and fidelity for most activities to form an opinion 9 that the IPS was reasonable. 10 11Q. DOES STAFF BELIEVE THERE WAS ANOTHER ISSUE WITH THE 12 BASELINE IPS? 13A. Yes. Staff believes not all activities were loaded into the Baseline IPS. Or if all 14 activities were loaded, they were loaded with insufficient detail and fidelity to be 15 useful. The total remaining activity counts for all schedules as of the June, 2016 16 IPS was 203,993. By September and December of 2016 the counts increased to 17 258,501, and 281,145, respectively. 18 291,157. Between the June, 2016 IPS and the March, 2017 IPS over ninety 19 thousand activities were added. 20 5 6 24 By the March 2017 IPS the count was 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1Q. PLEASE SUMMARIZE STAFF’S CONCLUSION WITH REGARD TO 2 THE BASELINE IPS. 3A. Neither SNC nor WEC had a reasonable Level 3 IPS that could have been used to 4 manage the Project even though they both recognized the value of this tool. 5 Company executives have stated XXXXXXXXXXXXXXXXXXXXXXXXXXX 6 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 7 xxx10. 8 9Q. WHEN IS A LEVEL THREE IPS EXPECTED TO BE READY? 10A. It is Staff’s understanding that sometime in the May-June 2017 time frame a 11 usable Level 3 will go live for the Project. If this time frame is met, it will be 12 available 18 months after the DSA dated December 31, 2015. 13 14Q. HAS STAFF RAISED THE ISSUE OF THE LACK OF A HIGH QUALITY 15 IPS IN PRIOR TESTIMONIES? 16A. Staff has raised this issue since the Sixth VCM. Given the scope and complexity 17 of this Project, not having a quality IPS makes it nearly impossible to proactively 18 identify, mitigate, and move beyond inevitable Project challenges. 19 20Q. COULD A REASONABLE ETC HAVE BEEN CALCULATED AT ANY 21 TIME? 510 6 7 Monthly Project Report meeting April 19, 2017. 25 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1A. Yes. If the Parties to the EPC Agreement had developed a reasonable, integrated, 2 and resource loaded IPS and ETC, this current expansion of costs to complete the 3 Project would have been known, or should have been known, years ago. 4 5Q. WHAT IMPACT COULD AN EARLIER AND ACCURATE 6 CALCULATION OF A LEVEL 3 IPS HAVE HAD ON THE CURRENT 7 STATUS OF THE PROJECT? 8A. Conceptually, had the Company developed a reasonable, fully integrated and 9 resource loaded IPS when Staff stated it was necessary beginning in the 6 th VCM 10 it would have shown that the then current forecast to complete the Project 11 (Schedule and Cost) were severely underestimated. Had an economic analysis 12 been performed at that time, before hundreds of millions of dollars of sunk costs 13 were incurred, a more accurate picture of the value of the Project relative to its 14 alternative would have been developed. Also, assuming the economics of the 15 Project remained positive, the Consortium could have had years to mitigate the 16 financial distress it is currently under. 17 18Q. DOES 19 REALISTIC AND UNDERSTOOD, ADDRESS THE SCHEDULE ISSUES 20 STATED ABOVE? 21A. Yes. Staff discussed this Principle in its Eleventh VCM testimony (Page 25, line 22 16). The following three INPO 4 attributes directly apply to the issues: 5 6 INPO PRINCIPLE NUMBER 26 FOUR, SCHEDULES ARE 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 o Schedules are maintained to reflect the best available information. They 2 are reviewed periodically by key stakeholders, and key milestones are 3 identified and communicated throughout all involved organizations. 4 o Schedules are used as a forecasting tool to ensure sufficient resources, 5 equipment, and materials are available to meet the schedule. Impacts on 6 resources are identified, analyzed, and addressed; for example, the 7 availability of skilled labor or additional resources needed to compensate 8 for unanticipated delays. 9 o High-risk activities are identified in the schedule and are planned 10 carefully. Additional oversight and contingency plans are developed, 11 where appropriate. 12 13Q. HOW DOES STAFF CHARACTERIZE THE REALIZATION THAT 14 PRIOR ESTIMATES TO COMPLETE WERE SEVERELY LACKING? 15A. Westinghouse’s voluntary bankruptcy was not the result of unforeseen or 16 uncontrollable circumstances. As stated above, the true cost and time to complete 17 the Project could have been known five years ago had a reasonable IPS been 18 developed. Stone and Webster, regardless of its parent company, was incurring 19 billions of dollars in losses related to the Project. There was no reason to believe 20 that these losses would simply stop because of Westinghouse’s purchase of Stone 21 and Webster. 22 5 6 27 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1Q. HAS STAFF BEEN MADE AWARE OF OR INCLUDED IN ANY 2 REVIEWS OF THE RECENTLY, COMPANY DEVELOPED ETC AND / 3 OR THE LEVEL 3 IPS? 4A. Only on a high level basis. We have not been provided any detailed ETC and IPS 5 Level 3 documentation. 6 7 8 III. FUTURE PROJECT RISKS 9 10Q. WHEN DID WESTINGHOUSE ELECTRIC COMPANY PETITION FOR 11 BANKRUPTCY? 12A. In December of 2016, Toshiba disclosed that it had discovered that a significant 13 amount of work necessary to complete Units 3 and 4 had not previously been 14 accounted for in its forecasted costs and schedules. According to Georgia Power, 15 it knew at some point in late 2016 that Westinghouse was going to file for 16 bankruptcy and that it was just a question of “when, not if.”11 On March 29, 2017, 17 Westinghouse filed its Petition. 18 19Q. UNDER WHAT CHAPTER OF THE UNITED STATES BANKRUPTCY 20 CODE DID WESTINGHOUSE PETITION? 511 6 7 March 30, 2017 Energy Committee. 28 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1A. Chapter 11 in the Southern District of New York. A case filed under Chapter 11 2 of the United States Bankruptcy Code is an attempt at re-organization with the 3 goal of exiting bankruptcy as a going concern. A Chapter 11 case begins with the 4 filing of a petition by the debtor, in this case Westinghouse Electric Company, 5 with the bankruptcy court serving the area where the debtor has a domicile or 6 residence. Chapter 11 is typically used to reorganize a business. A corporation 7 exists separate and apart from its owners, the stockholders. The Chapter 11 8 bankruptcy case of a corporation (corporation as debtor) does not put the personal 9 assets of the stockholders at risk other than the value of their investment in the 10 company's stock. 11 12Q. WHAT IMPACT DOES A DEBTOR’S PETITION FOR FILING A 13 CHAPTER 11 BANKRUPTCY HAVE ON ITS CREDITORS? 14A. At the time of filing the petition for Chapter 11, an automatic stay is established 15 which provides a period of time in which all judgments, collection activities, 16 foreclosures, and repossessions of property are suspended and may not be pursued 17 by the creditors on any debt or claim that arose before the filing of the bankruptcy 18 petition. A stay of creditor actions against the Chapter 11 debtor automatically 19 goes into effect when the bankruptcy petition is filed12. 20 21Q. ARE THE COMPANY AND OWNERS A SECURED OR UNSECURED 22 CREDITOR TO WESTINGHOUSE? 5 6 7 8 12 United States Courts http://www.uscourts.gov/services-forms/bankruptcy/bankruptcybasics/chapter-11-bankruptcy-basics. 29 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1A. Unsecured. This means that the Owners do not have a priority claim over other 2 creditors to any WEC assets. 3 4Q. WAS THIS ACTION A VOLUNTARY PETITION BY WESTINGHOUSE? 5A. Yes13. 6 7Q. WHO IS REPRESENTING WESTINGHOUSE IN THIS BANKRUPTCY 8 PROCEEDING? 9A. Ms. Lisa J. Donahue, Managing Director and Leader of the Global Turnaround 10 and Restructuring Group at AlixPartners L.L.C. 11 12Q. WHAT IS WESTINGHOUSE’S PLAN FOR RE-ORGANIZATION UNDER 13 BANKRUPTCY? 14A. As stated by Ms. Lisa J. Donahue “The Debtors [WEC and affiliates] will use 15 these chapter 11 cases to reorganize around their profitable Core Businesses 14 and 16 isolate them from the one specific area of their businesses that is losing money: 17 their construction of nuclear power plants in Georgia and South Carolina.” She 18 further states that “The Debtors will move purposefully… to …reorganize around 19 their Core Businesses and maximize their value, and emerge from chapter 11 as a 20 healthy and profitable company…”15 5 13 6 7 8 14 9 10 Southern District of New York 17-10751-mew Doc 1 Nuclear Fuel & Component Manufacturing; Operating Plant Business; Decommissioning Business; Services Business (excluding the Construction Services Business) 15 Southern District of New York 17-10751-mew Doc 4 Pages 3 and 5 30 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 2Q. HAS CONSTRUCTION, PROCUREMENT, AND ENGINEERING WORK 3 CONTINUED AT THE VOGTLE SITE SINCE THE WESTINGHOUSE 4 BANKRUPTCY? 5A. Generally, yes. 6 continuing construction of the Project. This has been accomplished by the signing 7 of an Interim Assessment Agreement set to expire on June 3, 2017. Staff is 8 concerned, however, that procurement may be impacted sooner than construction 9 should sub-contractors be unwilling to ship more product to the site as a result of 10 pre-petition accounts receivables not being paid by WEC. This in turn could 11 impact construction. To date Staff has not discerned a significant impact to the 12 13Q. HOW DOES THE INTERIM ASSESSMENT AGREEMENT ASSIGN 14 PROJECT COSTS? 15A. According to the Company a fee for WEC engineering and design services and 16 Fluor Corporation construction services are paid directly by the Company. To the 17 best of Staff’s knowledge all other sub-contractors are paid by the Company 18 indirectly through WEC. Staff notes that the Interim Assessment Agreement 19 (“IAA”) is cost-neutral and cash-neutral to Westinghouse16. 20 21Q. WILL THE COMPANY BE EXPOSED TO ADDITIONAL RISKS AS A 22 RESULT 5 6 7 16 OF THE RECENTLY DISCLOSED Southern District of New York 17-10751-mew Doc 4 Page 86 31 DEFICIENCIES IN 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 FORECASTED COSTS AND SCHEDULES AND SUBSEQUENT 2 WESTINGHOUSE BANKRUPTCY? 3 4A. Yes. Increased risks are detailed below: 5  Further delay risk may be material. The Company has recognized this 6 increase in risk in its 10-Q dated March 31, 2017 as follows: “In February 7 2017, the Contractor provided Georgia Power with revised forecasted in- 8 service dates of December 2019 and September 2020 for Plant Vogtle 9 Units 3 and 4, respectively. However, based on information subsequently 10 made available during Westinghouse and WECTEC's bankruptcy 11 proceedings and pursuant to the Interim Assessment Agreement, Georgia 12 Power and the Vogtle Owners do not believe the revised in-service dates 13 are achievable.” 14  Additional cost overruns may be material. The Company has recognized 15 this increase in risk in its 10-Q dated March 31, 2017 as follows: “Georgia 16 Power, along with the other Vogtle Owners, is undertaking a 17 comprehensive schedule and cost-to-complete assessment, as well as a 18 cancellation cost assessment. It is reasonably possible these assessments 19 result in estimated incremental costs to complete, including owners' costs, 20 which materially exceed the value of the Toshiba Guarantee.” 21 5 6 32 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1Q. WILL THE COMPANY BE EXPOSED TO NEW RISKS AS A RESULT OF 2 THE WESTINGHOUSE BANKRUPTCY? 3A. Yes. 4 Performance Guarantees will be provided by WEC. Any work during and post 5 construction required to bring the Units to their stated net megawatt output will be 6 to the account of the Company. Also, for the first time the Company will be 7 solely responsible for schedule and cost adherence. Effectively there is no cost 8 sharing with counterparties as a result of delays and overruns. All costs will 9 accrue to the Company and Co-owners. The most significant new risk is that without the EPC Agreement no 10 11Q. WHAT IMPACT DOES THIS HAVE ON THE COST OF FUTURE 12 MITIGATION 13 EXPERIENCE DELAYS? 14A. The cost of mitigation actions, such as doubling shifts, will accrue to the 15 Company and the Co-owners. ACTIONS SHOULD THE PROJECT AGAIN 16 17Q. WILL MATERIAL MITIGATION ACTIONS NEED TO BE TREATED 18 DIFFERENTLY? 19A. Material17 mitigation costs will be to the account of the Company and the Co- 20 owners. Consequently, it will no longer be as simple as demanding mitigation, 21 but rather each material mitigation strategy considered by the Company will need 5 6 7 8 9 10 17 Material in this context would be those actions that exceed a reasonable dollar threshold for becoming necessary to perform a cost benefit analysis. It is important to note that many mitigation actions occur daily on Project of this scope. It would be overly burdensome for every mitigation action to be processed through a cost benefit analysis. 33 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 to be economically assessed prior to its implementation and justified on a cost 2 benefit basis. 3 4Q. ARE GEORGIA POWER COMPANY RATEPAYERS SIGNIFICANTLY 5 PROTECTED GOING FORWARD? 6A. Yes. Due to the foresight of this Commission in its January 3, 2017 Order 7 adopting the Stipulation from the Construction Monitoring Proceeding Georgia 8 Power Company’s Plant Vogtle Units 3 and 4; Supplemental Information, Staff 9 Review, and Opportunity for Settlement, ratepayers are significantly protected 10 against further cost increases as a result of both Project delays and construction 11 overruns. 12 Association, both of whom have intervened in the Vogtle certification docket and 13 every VCM proceeding including this Sixteenth, also co-signed the Stipulation. The Georgia Industrial Group and the Georgia Manufacturers 14 15Q. DOES THE STIPULATION ADDRESS THE VERY ISSUES THAT THE 16 WESTINGHOUSE BANKRUPTCY RAISES? 17A. Yes. The Commission has determined the manner in which delays and cost 18 overruns are to be treated based on the thresholds in the Stipulation. 18 As Staff 19 explained at the time the Stipulation was being negotiated and considered by the 20 Commission, Staff did not believe that the Company could meet its current cost 21 and schedule forecasts. Staff gave up some of its rights to challenge certain costs 22 that it believed were imprudent expressly in exchange for the Company’s 518 6 7 http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=166377 34 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1 agreement to backend ratepayer protections in the event that Staff was correct. 2 These protections include items such as: automatic ROE reductions in the event 3 dates and budgets are missed; an affirmation that the certified capital cost will 4 remain fixed at $4.4 billion; the preservation of the Commission’s right to 5 disallow other costs and an agreement that the Company will retain the burden of 6 proof on prudency and reasonableness for capital costs above $5.6 billion; and, an 7 agreement that NCCR financing costs are only deemed prudent if incurred prior to 8 December 31, 2019 for Unit 3 and December 31, 2020 for Unit 4. 9 10 Because the Stipulation already provides a detailed roadmap for how to address 11 additional cost overruns and schedule delays, the Commission need not take any 12 action with regard to the consequences of the anticipated additional cost overruns 13 and delays or the WEC bankruptcy if the Commission wants the Project to 14 continue. Under the Stipulation, the Project cannot be placed into retail base rates 15 until it is completed and in Commercial Operation, as defined in paragraph 13 of 16 the Stipulation. At the time the Project is placed in rate base, Commission can 17 determine which costs are reasonable and prudent and allowable in rate base. 18 19 VI. RECOMMENDATION 20 5 6 35 1PUBLIC DISCLOSURE 2Direct Testimony of Steven D. Roetger and William R. Jacobs, Jr., Ph.D. 3Docket No. 29849, Sixteenth Semi-Annual Vogtle Construction Monitoring Period 4 1Q. WHAT IS YOUR RECOMMENDATION REGARDING VERIFICATION 2 AND APPROVAL OF EXPENDITURES DURING THE SIXTEENTH 3 VCM PERIOD? 4A. We recommend that the expenditures of $222 million incurred during the 5 Sixteenth VCM be verified and approved. As Staff has previously explained, 6 “verification and approval” of costs means a determination that such costs have 7 actually been spent on the Project and does not preclude a subsequent 8 disallowance by the Commission. 9 10Q. DOES THIS CONCLUDE YOUR TESTIMONY? 11A. Yes it does. 5 6 36 EXHIBIT Resume Of Steven D. Roetger 1Steven D. Roetger 2244 Washington Street, S.W. 3Atlanta, GA 30334 4 5Professional Experience 6Georgia Public Service Commission Atlanta, Georgia 2008-Present 7Analyst Primary responsibilities include monitoring the Vogtle expansion of Units 3 and 4, 8attending site visits on a regular basis, participate with the Commission and Company interface, 9and assist in the preparation of testimony. 10Key achievements 11Manage the Vogtle Construction monitoring process including engineering, procurement, and 12construction; economic analysis of the value of the Project; and financial accounting review for 13the Project’s costs. 14Write and review direct pre-filed testimony of the status of the Project for a semi-annual 15hearings. 16 17BCD Travel Atlanta, Georgia 2007-2008 18Finance Manager Primary responsibilities were to manage financial analysts, generate and 19review variance analyses, analyze departmental financials, and facilitate the coordination 20between our group and various internal departments. 21Key achievements 22Elevated team's performance to improve consistency, accuracy, and timeliness of service 23Identified client missed revenue opportunities and communicated to Operations for recapture 24and/or inclusion with future invoicing 25Key Requirements 26Train, motivate, and develop 3 financial analysts to achieve an outstanding level of service and 27performance 28Direct work flow to maintain efficiency and productivity without compromising standards 29Analyze departmental financials to maximize profitability by reviewing contracts, perform 30variance analyzes, and ensure complete transaction billing 31Review complex contracts and interpret for finance reconciliation and billing procedures 32Prepare client budgets and forecasts 33 34Marine Bank of Florida Marathon, Florida2003-2005 35Accounting Operations Manager/Bank Officer Primary responsibilities were to manage the 36Bank's Accounting Department and, as directed by the COO, Deposit Operations' functions. 37Key achievements 38Identified high-risk, time sensitive accounts for dedicated review to significantly reduce financial 39risk to the Bank 40In partnership with the CFO reduced audit management exceptions from 13 to zero year over 41year 42Launched new wire department procedures to decrease response time, increase capacity, and 43improve customer service without increasing staff 44In partnership with the COO implemented the Bank's new ACH operations to enhance existing 45customer relations, attract new business, and respond in a timely manner to ACH 46adjustments/returns 1 -12 1 1Key Requirements 2Comprehensive G/L management including reconciliations, adjusting entries, and 3monthly/annual close 4Manage and review the activities of 3 accounting and 2 deposit operations personnel responsible 5for accounts payable, wires, ACH operations, VISA check card operations, branch settlements, 6electronic funds transfers, and check clearing. 7Establish and refine departmental policies and procedures to improve accuracy and timeliness of 8reporting, facilitate employee transition, and meet audit requirements 9Oversaw Federal Reserve, FHLB, and IBB correspondent accounts 10Supported the CFO to meet external audit requirements 11Oversaw the Bank's daily cash position to minimize overnight net interest expense 12Support branch operations by assisting branch managers maintain acceptable internal controls, 13provide training on Bank reporting procedures, and process exceptions 14 15B. Terfloth &Co. USA) Inc. Atlanta, Georgia 1998-2000 16Accounting Manager Primary responsibilities were to manage the Branch's Accounting 17Department with an emphasis on controlling expenses and manage the yearly audit process. 18Key achievements 19Re-established accurate and timely monthly reporting to the Corporate Office 20Developed a cash flow forecasting model to assess the Branch's financing needs and negotiated 21under the President's supervision a working capital credit line to meet those needs 22Key requirements 23Comprehensive G/L management including reconciliations, adjusting entries, and 24monthly/annual close 25Manage the annual audit process 26Accounts payable and accounts receivable 27Payroll and annual bonus calculations 28 29Bridgetown Grill Restaurants Inc. Atlanta, Georgia1996-1997 30Interim Controller Primary responsibilities were to re-establish a reliable Accounting process 31and once established facilitate the transition to a new Controller. 32Key achievements 33Established internal controls to better manage purchases, inventories, and reduce cash variances 34Developed Accounting procedures for Unit Managers and trained the management staff on those 35procedures 36Assisted the Owner in evaluating an outside purchase offer 37Key requirements 38Comprehensive G/L management including reconciliations, adjusting entries, and monthly close 39procedures 40Coordinate the annual audit process 41Manage accounts payable and payroll processing 42Manage credit card transaction procedures to reduce charge backs 43 44Turner Broadcasting System Inc. Atlanta, Georgia 1991-1996 45Staff Accountant Primary responsibility was to support the Managers with accurate and timely 46completion of assigned tasks. 2 1 1Key achievements 2Partnered with Management to streamline the procedure for The Statement of Cash Flows 3Corrected the EPS calculation 4Streamlined governmental reporting and incorporated detailed procedures for each report 5Provided a Companywide vacation and sick time accrual analysis 6Key requirements 7Worked, as part of a team, on the Consolidated Financial Statements of TBS, Inc. 8Develop various footnotes to the Financial Statements 9Provide analysis of accounts for actual to budget and actual to rolling12 month forecast variances 10Provide analysis of, and recommendations for, lease capitalizations 11Coordinate with 72 Operating Unit Controllers for the content and timely receipt of Unit 12financial data 13Prepare debt covenant calculations for 4 issues and provide forecasts with sensitivity analysis 14Prepare all U.S. Department of Commerce and U.S. Treasury Department statistical reports 15 16Software 17PeopleSoft/nVision reporting, Kirchman/Bankway and IPS Sendero banking software, MSA accounting 18software, Excel, Outtask, and Word 19 20Education 21 22BBA Georgia State University in Finance with an equivalent in Accounting 23Completed 70 percent of course work toward an MBA in Finance from Georgia State University 24 25 26 27 28 29 30 31 32 33 34 2 EXHIBIT STF-SR/WRJ-2 Resume Of William R. Jacobs, 1William R. Jacobs, Jr. GDS Associates, Inc. 2Executive Consultant Page 1 of 7 4 1EDUCATION: Ph.D., Nuclear Engineering, Georgia Tech 1971 2 MS, Nuclear Engineering, Georgia Tech 1969 3 BS, Mechanical Engineering, Georgia Tech 1968 4 5ENGINEERING REGISTRATION: Registered Professional Engineer 6 7PROFESSIONAL MEMBERSHIP: American Nuclear Society 8 9 10EXPERIENCE: 11 12Dr. Jacobs has over thirty-five years of experience in a wide range of activities in the electric 13power generation industry. He has extensive experience in the construction, startup and 14operation of nuclear power plants. While at the Institute of Nuclear Power Operation (INPO), 15Dr. Jacobs assisted in development of INPO’s outage management evaluation group. He has 16provided expert testimony related to nuclear plant operation and outages in Texas, Louisiana, 17South Carolina, Florida, Wisconsin, Indiana, Georgia and Arizona. He currently provides 18nuclear plant operational monitoring services for GDS clients. Dr. Jacobs was a witness in 19nuclear plant certification hearings in Georgia for the Plant Vogtle 3 and 4 project on behalf of 20the Georgia Public Service Commission and in South Carolina for the V.C. Summer 2 and 3 21projects on behalf of the South Carolina Office of Regulatory Staff. His areas of expertise 22include evaluation of reactor technology, EPC contracting, risk management and mitigation, 23project cost and schedule. He is assisting the Florida Office of Public Counsel in monitoring the 24development of four new nuclear units in the State of Florida, Levy County Units 1 and 2 and 25Turkey Point Units 6 and 7. He also evaluated extended power uprates on five nuclear units for 26the Florida Office of Public Counsel. He has been selected by the Georgia Public Service 27Commission as the Independent Construction Monitor for Georgia Power Company’s new 28AP1000 nuclear power plants, Plant Vogtle Units 3 and 4. He has assisted the Georgia Public 29Service Commission staff in development of energy policy issues related to supply-side 30resources and in evaluation of applications for certification of power generation projects and 31assists the staff in monitoring the construction of these projects. He has also assisted in 32providing regulatory oversight related to an electric utility’s evaluation of responses to an RFP 33for a supply-side resource and subsequent negotiations with short-listed bidders. He has 34provided technical litigation support and expert testimony support in several complex law suits 35involving power generation facilities. He monitors power plant operations for GDS clients and 36has provided testimony on power plant operations and decommissioning in several jurisdictions. 37Dr. Jacobs represents a GDS client on the management committee of a large coal-fired power 38plant currently under construction. Dr. Jacobs has provided testimony before the Georgia Public 39Service Commission, the Public Utility Commission of Texas, the North Carolina Utilities 40Commission, the South Carolina Public Service Commission, the Iowa State Utilities Board, the 41Louisiana Public Service Commission, the Florida Public Service Commission, the Indiana 42Regulatory Commission, the Wisconsin Public Service Commission, the Arizona Corporation 43Commission and the FERC. 44 3 5 6 7 8 9 10 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA 30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 1William R. Jacobs, Jr. GDS Associates, Inc. 2Executive Consultant Page 2 of 7 4 1A list of Dr. Jacobs’ testimony is available upon request. 2 31986-Present GDS Associates, Inc. 4 5 As Executive Consultant, Dr. Jacobs assists clients in evaluation of management and 6 technical issues related to power plant construction, operation and design. He has 7 evaluated and testified on combustion turbine projects in certification hearings and has 8 assisted the Georgia PSC in monitoring the construction of the combustion turbine 9 projects. Dr. Jacobs has evaluated nuclear plant operations and provided testimony in the 10 areas of nuclear plant operation, construction prudence and decommissioning in nine 11 states. He has provided litigation support in complex law suits concerning the 12 construction of nuclear power facilities. Dr. Jacobs is the Georgia PSC’s Independent 13 Construction Monitor for the Plant Vogtle 3 and 4 nuclear project. 14 151985-1986 Institute of Nuclear Power Operations (INPO) 16 17 Dr. Jacobs performed evaluations of operating nuclear power plants and nuclear power 18 plant construction projects. He developed INPO Performance Objectives and Criteria for 19 the INPO Outage Management Department. Dr. Jacobs performed Outage Management 20 Evaluations at the following nuclear power plants: 21 22  Connecticut Yankee - Connecticut Yankee Atomic Power Co. 23  Callaway Unit I - Union Electric Co. 24  Surry Unit I - Virginia Power Co. 25  Ft. Calhoun - Omaha Public Power District 26  Beaver Valley Unit 1 - Duquesne Light Co. 27 28During these outage evaluations, he provided recommendations to senior utility management on 29techniques to improve outage performance and outage management effectiveness. 30 311979-1985 Westinghouse Electric Corporation 32 33 As site manager at Philippine Nuclear Power Plant Unit No. 1, a 655 MWe PWR located 34 in Bataan, Philippines, Dr. Jacobs was responsible for all site activities during completion 35 phase of the project. He had overall management responsibility for startup, site 36 engineering, and plant completion departments. He managed workforce of 37 approximately 50 expatriates and 1700 subcontractor personnel. Dr. Jacobs provided 38 day-to-day direction of all site activities to ensure establishment of correct work 39 priorities, prompt resolution of technical problems and on schedule plant completion. 40 41 Prior to being site manager, Dr. Jacobs was startup manager responsible for all startup 42 activities including test procedure preparation, test performance and review and 43 acceptance of test results. He established the system turnover program, resulting in a 44 timely turnover of systems for startup testing. 5 3 6 7 8 9 10 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA 30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 1William R. Jacobs, Jr. GDS Associates, Inc. 2Executive Consultant Page 3 of 7 4 1 2 As startup manager at the KRSKO Nuclear Power Plant, a 632 MWE PWR near Krsko, 3 Yugoslavia, Dr. Jacobs' duties included development and review of startup test 4 procedures, planning and coordination of all startup test activities, evaluation of test 5 results and customer assistance with regulatory questions. He had overall responsibility 6 for all startup testing from Hot Functional Testing through full power operation. 7 1973 - 1979 NUS Corporation 8 9 As Startup and Operations and Maintenance Advisor to Korea Electric Company during 10 startup and commercial operation of Ko-Ri Unit 1, a 595 MWE PWR near Pusan, South 11 Korea, Dr. Jacobs advised KECO on all phases of startup testing and plant operations and 12 maintenance through the first year of commercial operation. He assisted in establishment 13 of administrative procedures for plant operation. 14 As Shift Test Director at Crystal River Unit 3, an 825 MWE PWR, Dr. Jacobs directed 15 and performed many systems and integrated plant tests during startup of Crystal River 16 Unit 3. He acted as data analysis engineer and shift test director during core loading, low 17 power physics testing and power escalation program. 18 19 As Startup engineer at Kewaunee Nuclear Power Plant and Beaver Valley, Unit 1, Dr. 20 Jacobs developed and performed preoperational tests and surveillance test procedures. 21 221971 - 1973 Southern Nuclear Engineering, Inc. 23 24 Dr. Jacobs performed engineering studies including analysis of the emergency core 25 cooling system for an early PWR, analysis of pressure drop through a redesigned 26 reactor core support structure and developed a computer model to determine 27 tritium build up throughout the operating life of a large PWR. 28 29SIGNIFICANT CONSULTING ASSIGNMENTS: 30 31Georgia Public Service Commission – Selected as the Independent Construction Monitor to 32assist the GPSC staff in monitoring all aspects of the design, licensing and construction of Plant 33Vogtle Units 3 and 4, two AP1000 nuclear power plants. 34 35Georgia Public Service Commission – Assisted the Georgia Public Service Commission Staff 36and provided testimony related to the evaluation of Georgia Power Company’s request for 37certification to construct two AP1000 nuclear power plants at the Plant Vogtle site. 38 39South Carolina Office of Regulatory Staff – Assisted the South Carolina Office of Regulatory 40Staff in evaluation of South Carolina Electric and Gas’ request for certification of two AP1000 41nuclear power plants at the V.C. Summer site. 42Florida Office of Public Counsel – Assists the Florida Office of Public Counsel in monitoring the 43development of four new nuclear power plants and extended power uprates on five nuclear units 44in Florida including providing testimony on the prudence of expenditures. 3 5 6 7 8 9 10 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA 30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 1William R. Jacobs, Jr. GDS Associates, Inc. 2Executive Consultant Page 4 of 7 4 1 2East Texas Electric Cooperative – Represented ETEC on the management committee of the Plum 3Point Unit 1 a 650 Mw coal-fired plant under construction in Osceola, Arkansas and represents 4ETEC on the management committee of the Harrison County Power Project, a 525 Mw 5combined cycle power plant located near Marshall, Texas. 6 7Arizona Corporation Commission – Evaluated operation of the Palo Verde Nuclear Generating 8Station during the year 2005. Included evaluation of 11 outages and providing written and oral 9testimony before the Arizona Corporation Commission. 10 3 11Citizens Utility Board of Wisconsin – Evaluated Spring 2005 outage at the Kewaunee Nuclear 12Power Plant and provided direct and surrebuttal testimony before the Wisconsin Public Service 13Commission. 14 15Georgia Public Service Commission - Assisted the Georgia PSC staff in evaluation of Integrated 16Resource Plans presented by two investor owned utilities. Review included analysis of purchase 17power agreements, analysis of supply-side resource mix and review of a proposed green power 18program. 19 20State of Hawaii, Department of Business, Economic Development and Tourism – Assisted the 21State of Hawaii in development and analysis of a Renewable Portfolio Standard to increase the 22amount of renewable energy resources developed to meet growing electricity demand. Presented 23the results of this work in testimony before the State of Hawaii, House of Representatives. 24 25Georgia Public Service Commission - Assisted the Georgia PSC staff in providing oversight to 26the bid evaluation process concerning an electric utility’s evaluation of responses to a Request 27for Proposals for supply-side resources. Projects evaluated include simple cycle combustion 28turbine projects, combined cycle combustion turbine projects and co-generation projects. 29 30Millstone 3 Nuclear Plant Non-operating Owners – Evaluated the lengthy outage at Millstone 3 31and provided analysis of outage schedule and cost on behalf of the non-operating owners of 32Millstone 3. Direct testimony provided an analysis of additional post-outage O&M costs that 33would result due to the outage. Rebuttal testimony dealt with analysis of the outage schedule. 34 35H.C. Price Company – Evaluated project management of the Healy Clean Coal Project on behalf 36of the General Contractor, H.C. Price Company. The Healy Clean Coal Project is a 50 megawatt 37coal burning power plant funded in part by the DOE to demonstrate advanced clean coal 38technologies. This project involved analysis of the project schedule and evaluation of the impact 39of the owner’s project management performance on costs incurred by our client. 40 41Steel Dynamics, Inc. – Evaluated a lengthy outage at the D.C. Cook nuclear plant and presented 42testimony to the Indiana Utility Regulatory Commission in a fuel factor adjustment case Docket 43No. 38702-FAC40-S1. 5 6 7 8 9 10 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA 30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 1William R. Jacobs, Jr. GDS Associates, Inc. 2Executive Consultant Page 5 of 7 4 1 2Florida Office of Public Counsel - Evaluated lengthy outage at Crystal River Unit 3 Nuclear 3Plant. Submitted expert testimony to the Florida Public Service Commission in Docket No. 4970261-EI. 5 6United States Trade and Development Agency - Assisted the government of the Republic of 7Mauritius in development of a Request for Proposal for a 30 MW power plant to be built on a 8Build, Own, Operate (BOO) basis and assisted in evaluation of Bids. 9 10Louisiana Public Service Commission Staff - Evaluated management and operation of the River 11Bend Nuclear Plant. Submitted expert testimony before the LPSC in Docket No. U-19904. 12 13U.S. Department of Justice - Provided expert testimony concerning the in-service date of the 14Harris Nuclear Plant on behalf of the Department of Justice U.S. District Court. 15 16City of Houston - Conducted evaluation of a lengthy NRC required shutdown of the South Texas 17Project Nuclear Generating Station. 18 19Georgia Public Service Commission Staff - Evaluated and provided testimony on Georgia Power 20Company's application for certification of the Intercession City Combustion Turbine Project 21Docket No. 4895-U. 22 23Seminole Electric Cooperative, Inc. - Evaluated and provided testimony on nuclear 24decommissioning and fossil plant dismantlement costs - FERC Docket Nos. ER93-465-000, et 25al. 26 27Georgia Public Service Commission Staff - Evaluated and prepared testimony on application for 28certification of the Robins Combustion Turbine Project by Georgia Power Company - Docket 29No. 4311-U. 30 31North Carolina Electric Membership Corporation - Conducted a detailed evaluation of Duke 32Power Company's plans and cost estimate for replacement of the Catawba Unit 1 Steam 33Generators. 34 35Georgia Public Service Commission Staff - Evaluated and prepared testimony on application for 36certification of the McIntosh Combustion Turbine Project by Georgia Power Company and 37Savannah Electric Power Company - Docket No. 4133-U and 4136-U. 38 39New Jersey Rate Counsel - Review of Public Service Electric & Gas Company nuclear and fossil 40capital additions in PSE&G general rate case. 41 42Corn Belt Electric Cooperative/Central Iowa Power Electric Cooperative - Directs an operational 43monitoring program of the Duane Arnold Energy Center (565 Mwe BWR) on behalf of the non44operating owners. 3 5 6 7 8 9 10 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA 30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 1William R. Jacobs, Jr. GDS Associates, Inc. 2Executive Consultant Page 6 of 7 4 1 2Cities of Calvert and Kosse - Evaluated and submitted testimony of outages of the River Bend 3Nuclear Station - PUCT Docket No. 10894. 4 5Iowa Office of Consumer Advocate - Evaluated and submitted testimony on the estimated 6decommissioning costs for the Cooper Nuclear Station - IUB Docket No. RPU-92-2. 7 8Georgia Public Service Commission/Hicks, Maloof & Campbell - Prepared testimony related to 9Vogtle and Hatch plant decommissioning costs in 1991 Georgia Power rate case - Docket No. 104007-U. 11 12City of El Paso - Testified before the Public Utility Commission of Texas regarding Palo Verde 13Unit 3 construction prudence - Docket No. 9945. 14 15City of Houston - Testified before Texas Public Utility Commission regarding South Texas 16Project nuclear plant outages - Docket No. 9850. 17 18NUCOR Steel Company - Evaluated and submitted testimony on outages of Carolina Power and 19Light nuclear power facilities - SCPSC Docket No. 90-4-E. 20 21Georgia Public Service Commission/Hicks, Maloof & Campbell - Assisted Georgia Public 22Service Commission staff and attorneys in many aspects of Georgia Power Company's 1989 rate 23case including nuclear operation and maintenance costs, nuclear performance incentive plan for 24Georgia and provided expert testimony on construction prudence of Vogtle Unit 2 and 25decommissioning costs of Vogtle and Hatch nuclear units - Docket No. 3840-U. 26 27Swidler & Berlin/Niagara Mohawk - Provided technical litigation support to Swidler & Berlin in 28law suit concerning construction mismanagement of the Nine Mile 2 Nuclear Plant. 29 30Long Island Lighting Company/Shea & Gould - Assisted in preparation of expert testimony on 31nuclear plant construction. 32 33North Carolina Electric Membership Corporation - Prepared testimony concerning prudence of 34construction of Carolina Power & Light Company's Shearon Harris Station - NCUC Docket No. 35E-2, Sub537. 36 37City of Austin, Texas - Prepared estimates of the final cost and schedule of the South Texas 38Project in support of litigation. 39 40Tex-La Electric Cooperative/Brazos Electric Cooperative - Participated in performance of a 41construction and operational monitoring program for minority owners of Comanche Peak 42Nuclear Station. 43 3 5 6 7 8 9 10 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA 30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 1William R. Jacobs, Jr. GDS Associates, Inc. 2Executive Consultant Page 7 of 7 4 1Tex-La Electric Cooperative/Brazos Electric Cooperative/Texas Municipal Power Authority 2(Attorneys - Burchette & Associates, Spiegel & McDiarmid, and Fulbright & Jaworski) 3Assisted GDS personnel as consulting experts and litigation managers in all aspects of the 4lawsuit brought by Texas Utilities against the minority owners of Comanche Peak Nuclear 5Station. 6 3 7 5 6 7 8 9 10 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA 30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com