1 2 3 4 5 BEFORE THE GEORGIA PUBLIC SERVICE COMMISSION IN THE MATTER OF: GEORGIA POWER COMPANY’S SEVENTH SEMI-ANNUAL VOGTLE CONSTRUCTION MONITORING REPORT DOCKET NO.: 29849 6 7 8 9 10 PUBLIC DISCLOSURE DIRECT TESTIMONY AND EXHIBITS OF WILLIAM R. JACOBS, JR., PhD. 11 12 13 14 15 ON BEHALF OF THE 16 GEORGIA PUBLIC SERVICE COMMISSION 17 18 19 20 21 PUBLIC INTEREST ADVOCACY STAFF December 7, 2012 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 22 23 Table of Contents 24 25I. INTRODUCTION.......................................................................................................1 26II. DESCRIPTION OF CONSTRUCTION MONITORING ACTIVITIES....................4 27III. PROJECT STATUS.....................................................................................................6 28IV. REVIEW OF CONSORTIUM PERFORMANCE....................................................13 29V. REVIEW OF NRC PERFORMANCE......................................................................20 30VI. SCHEDULE ANALYSIS..........................................................................................21 31VII. OTHER ISSUES AND CHALLENGES...................................................................26 32VIII.CONCLUSIONS AND RECOMMENDATIONS.....................................................27 33 34 35Exhibits: 36 37STF-WRJ-1 Resume of William R. Jacobs, Jr., Ph.D. 38STF-WRJ-2 Graph of Planned versus Actual CFC Engineering Package Issuance 39 40 1 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period I. 41 INTRODUCTION 42Q. PLEASE STATE YOUR NAME, TITLE AND BUSINESS ADDRESS. 43 A. My name is William R. Jacobs, Jr., Ph.D. I am an executive consultant with GDS 44 Associates, Inc. My business address is 1850 Parkway Place, Suite 800, Marietta, 45 Georgia, 30067. 46Q. DR. 47 BACKGROUND AND EXPERIENCE. 48A. I received a Bachelor of Mechanical Engineering in 1968, a Master of Science in 49 Nuclear Engineering in 1969 and a Ph.D. in Nuclear Engineering in 1971, all 50 from the Georgia Institute of Technology. I am a registered professional engineer 51 and a member of the American Nuclear Society. I have more than thirty years of 52 experience in the electric power industry including more than twelve years of 53 nuclear power plant construction and start-up experience. I have participated in 54 the construction and start-up of seven nuclear power plants in this country and 55 overseas in management positions including start-up manager and site manager. 56 As a loaned employee to the Institute of Nuclear Power Operations (“INPO”), I 57 participated in the Construction Project Evaluation Program, performed operating 58 plant evaluations and assisted in development of the Outage Management 59 Evaluation Program. 60 participated in rate case and litigation support activities related to power plant 61 construction, operation and decommissioning. I have evaluated nuclear power JACOBS, PLEASE SUMMARIZE YOUR EDUCATIONAL Since joining GDS Associates, Inc. in 1986, I have 1 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 62 plant outages at numerous nuclear plants throughout the United States. I served 63 on the management committee of Plum Point Unit 1, a 650 Megawatts Electric 64 (“MWe”) coal fired power plant under construction near Osceola, Arkansas. As a 65 member of the management committee, I assisted in providing oversight of the 66 Engineering, Procurement and Construction (“EPC”) contractor for this project. 67 My resume is included in Exhibit STF-WRJ-1. 68Q. DR. JACOBS, WHAT IS THE NATURE OF YOUR BUSINESS? 69A. GDS Associates, Inc. (“GDS”) is an engineering and consulting firm with offices 70 in Marietta, Georgia; Austin, Texas; Corpus Christi, Texas; Manchester, New 71 Hampshire; Madison, Wisconsin; Augusta, Maine; and Auburn, Alabama. GDS 72 provides a variety of services to the electric utility industry including power 73 supply planning, generation support services, rates and regulatory consulting, 74 financial analysis, load forecasting and statistical services. 75 Generation Services, provides fossil and nuclear plant monitoring, plant 76 ownership feasibility studies, plant management audits, production cost modeling 77 and expert testimony on matters relating to plant management, construction, 78 licensing and performance issues in technical litigation and regulatory 79 proceedings. 80Q. WHOM ARE YOU REPRESENTING IN THIS PROCEEDING? 81A. I am representing the Georgia Public Service Commission (“Commission”) Public 82 Interest Advocacy Staff (“Staff”). 2 My department, PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 83Q. WHAT IS YOUR INVOLVEMENT WITH THE VOGTLE 3 AND 4 84 PROJECT? 85A. I am the Commission’s Independent Construction Monitor (“CM”) for the Vogtle 86 Units 3 and 4 Project (“Project”). As such, my duties are to assist the Staff in 87 providing regulatory oversight of all aspects of the Project and to keep the 88 Commission informed of significant Project issues or changes in the projected 89 cost and schedule as they occur. I have presented testimony in the First, Second, 90 Third, Fourth, Fifth and Sixth Semi-Annual Vogtle Construction Monitoring 91 (“VCM”) proceedings describing the construction monitoring activities, the status 92 of the Project and any concerns or significant issues that I identified. 93Q. WHAT IS YOUR ASSIGNMENT IN THIS PROCEEDING? 94 My assignment is to present the results of the Staff and CM’s Project oversight 95 from certification of the Project to the present with emphasis on the time period 96 covered by the Seventh Semi-Annual Vogtle Construction Monitoring Report, 97 January 1, 2012 through June 30, 2012. I will provide a description of the 98 construction monitoring activities that have occurred since the May 30, 2012 99 testimony I rendered in this docket. I will describe the current status of the 100 Project and will update the Commission on issues that have the potential to 101 impact the schedule or cost of the Project that I have discussed in prior testimony 102 in this docket and identify any new issues that have arisen since the Sixth Semi- 103 Annual Vogtle Construction Monitoring filing. 3 Finally I will make a PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 104 recommendation regarding the costs submitted by Georgia Power Company 105 (“Company”) for verification and approval. 106 II. 107 DESCRIPTION OF CONSTRUCTION MONITORING ACTIVITIES 108Q. PLEASE DESCRIBE THE CONSTRUCTION MONITORING PROGRAM 109 THAT THE STAFF AND INDEPENDENT CONSTRUCTION MONITOR 110 HAVE IMPLEMENTED TO MONITOR THE CONSTRUCTION OF THE 111 VOGTLE 3 AND 4 PROJECT. 112A. The Staff and the CM continue to be very active in monitoring the Project. These 113 activities include monthly meetings with Staff and Company personnel to discuss 114 Project status, regular trips to the Vogtle Project site to observe the monthly EPC 115 meeting and to witness firsthand construction activities and progress. The CM 116 has observed readiness review meetings in which Company and Consortium1 117 personnel review the Consortium’s plan for key activities, attended training on the 118 ITAAC2 process and accompanied Company senior management on a visit(s) to 119 Shaw Modular Solutions. In addition, the CM team has continued its review of 120 the Company’s process for handling Project invoices from Westinghouse and 121 Shaw. This includes review of the Project cost control procedures and sampling 11 The Consortium consists of Westinghouse Electric Company, and Stone and Webster a wholly owned 2subsidiary of the Shaw Group. 32 ITAAC stands for Inspections, Tests, Analyses and Acceptance Criteria. ITAAC are prescribed in the 4Design Control Document and provides the Regulator with objective evidence that the plant and its 5equipment were procured and constructed in accordance with the certified design. 4 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 122 of processed invoices. Other activities conducted by the Vogtle Construction 123 Monitoring team include: 124  Review of weekly Metrics reports issued by the Company; 125  Review of monthly Project status reports issued by the Company; 126  Review of monthly EPC status reports; 127  Review of the Company’s Semi-Annual Construction Monitoring 128 129 Reports;  Preparation of discovery requests for additional information as needed 130 following review of the monthly status reports, semi-annual 131 construction monitoring reports or meetings with the Company; 132  133 134 Participation in Nuclear Regulatory Commission (“NRC”) public meetings;  135 Review of public correspondence between the Company and the NRC via the NRC website; 136  Review of correspondence between the Consortium and the Company; 137  Review of trade articles and journals related to new nuclear power 138 plant development. 139Q. HOW DO YOU KEEP THE STAFF INFORMED ABOUT THE CURRENT 140 STATUS OF THE VOGTLE 3 AND 4 PROJECT? 141A. I discuss the status of the Project and any issues or concerns that have arisen with 142 the Staff in frequent conference calls, meetings and other written communication. 143 Each week I forward to the Staff the Company’s Weekly metrics report along with 5 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 144 my comments and observations. In addition, I submit two monthly reports to the 145 Staff. At the beginning of each month I submit a Construction Monitor report that 146 describes the current status of the Project’s existing issues or concerns and 147 identifies any new significant issues or concerns. A copy of this report is 148 provided to Commissioners each month. In addition, following each monthly 149 EPC meeting I submit a summary of the meeting and my observations to both the 150 Staff and the Company which is reviewed and edited by the Staff for further 151 clarification and accuracy. In this report I also include comments and 152 clarifications provided by the Company to ensure that the report is factually 153 accurate. 154 III. PROJECT STATUS 155Q. 156A. WHAT IS THE CURRENT SCHEDULE FOR THE PROJECT? That question is difficult to answer because at this time there is no Integrated 157 Project Schedule (“IPS”) that all parties agree with and support. Per the EPC 158 Agreement, the Guaranteed Substantial Completion Date (“GSCD”) for Unit 3 is 159 April 1, 2016 and April 1, 2017 for Unit 4. These are the certified Commercial 160 Operation Dates (“COD”). The Company has acknowledged that the GSCDs are 161 not achievable in response to STF 32-16 and in Mr. McKinney’s testimony in the 162 6th VCM proceeding. In the 7th VCM report the Company states that the Project 163 will be finished “no earlier” than November 2016 for Unit 3 and November 2017 164 for Unit 4. Most recently on the witness stand Mr. McKinney stated that the 165 Company is using November 2016 for Unit 3 and November 2017 for Unit 4 as 6 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 166 the Project CODs but the Consortium is using a date that is “slightly later.” When 167 pressed on the meaning of slightly later Mr. McKinney clarified that the 168 169Q. Consortium is using early to mid-2017 for Unit 3 COD. WHAT IS THE BASIS OF THE NOVEMBER 2016 DATE THE COMPANY 170 171A. IS USING? November 2016 is the Unit 3 COD from the IPS that the Consortium provided to 172 the Company in June 2012. It is based on receipt of the Combined License 173 (“COL”) in February 2012 plus the 57-month duration contemplated in the EPC 174 Agreement. This duration starts with installation of rebar in the Nuclear Island 175 176Q. (“NI”) to Commercial Operation for Unit 3. DO YOU CONSIDER THE NOVEMBER 2016 DATE TO BE 177 178A. REASONABLE AND ACHIEVABLE? As discussed in more detail in the Schedule Analysis section of my testimony, I 179 do not consider the November 2016 date to be reasonable or achievable. This 180 date does not consider the delays in placement of First Nuclear Concrete that have 181 been experienced and also does not consider the current status of module 182 fabrication and assembly. Both of these factors must be incorporated for a 183 184Q. schedule to be considered reasonable and achievable. HOW IS THE PROJECT BEING MANAGED BY THE COMPANY AT 185 186A. THIS TIME? At this time the Company manages the Project using six-month look ahead 187 188Q. schedules provided by the Consortium. CAN THE VOGTLE PROJECT BE PROPERLY MANAGED USING A 189 190A. SIX-MONTH LOOK AHEAD SCHEDULE? No. It is not prudent to manage a project of the size and complexity of the Vogtle 191 3 and 4 Project without a fully Integrated Project Schedule that is accepted by all 7 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 192 parties. Furthermore, Staff would consider any additional costs the Company 193 may seek to recover that result from its failure to have a fully Integrated Project 194 195Q. Schedule to be imprudent. WHY DOES A PROJECT OF THIS MAGNITUDE NEED AN 196 197A. INTEGRATED PROJECT SCHEDULE? I previously discussed the reasons the Vogtle Project needs a realistic, agreed 198 upon IPS in some detail in my testimony in the 6th VCM proceedings. The need 199 for an IPS is so important to the Project that I will repeat the rationale here. The 200 Vogtle Project needs a realistic, agreed upon IPS as generally outlined in the 201 Institute of Nuclear Power Operations (INPO)3 Principle Number 4 for nuclear 202 power plant construction. Principle Number 4 is “xxxxxxxxxxxxxxxxxxxxxx 203 xxxxxxxxxx.” The INPO principle describes the importance of having a realistic 204 and understood schedule. The attributes of INPO Principle Number 4 best 205 describe the importance of a realistic schedule and are presented below: 206 207 208 209 210 211 212 213 214 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxx. 215 The importance of a realistic schedule is demonstrated in the attributes associated 216 with INPO Principle No. 4 shown below. 63 INPO sets performance objectives, criteria, and guidelines industry-wide for nuclear power plant 7construction and operation. The intent is to promote operational and construction excellence and improve 8the sharing of experience between nuclear power plants operators. All United States commercial nuclear 9power plant operators are paid members of INPO. 8 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255Q. DOES THE COMPANY CURRENTLY HAVE IN ITS POSSESSION A 256 FULLY INTEGRATED PROJECT SCHEDULE FROM THE 257 CONSORTIUM THAT IS CONSISTENT WITH THE CRITERIA IN INPO xxxxxxxxxx  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx .  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxx.  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx organizations.  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx.  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx. 9 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 258 PRINCIPLE NO. 4 – XXXXXXXXXXXXXXXXXXXXXXXXX 259 260A. 261Q. XXXXXXXXXXX? No. HAVE YOU CONDUCTED ADDITIONAL ANALYSIS OF THE PROJECT 262 263A. SCHDUELE? Yes I have. My analysis of the current Project schedule is provided in Section VI 264 of this testimony. 265Q. WHAT IS THE CURRENT STATUS OF THE PROJECT BUDGET? 266A. As reported in the Company’s 7th VCM report, as of June 30, 2012, the Total 267 Project Cost to date was $127 million under budget with Total Construction and 268 Capital Cost being $121 million under budget and Total Construction Schedule 269 Financing Cost being $7 million under budget. These budget variances are due 270 primarily to timing differences between actual expenditures and the budget and 271 should not impact Total Project Cost. More plainly, the Project is under budget 272 because the Consortium has not completed the milestones necessary to receive 273 milestone payments as anticipated in the EPC Agreement. Thus, the Consortium 274 has been paid less at this time than projected by the EPC Agreement because they 275 have not accomplished work according to scheduled milestones. The Current 276 Forecast of Total Project Cost is $6.201 billion, which is $88million above the 277 currently certified amount of $6.113 billion. 278Q. HAVE YOU IDENTIFIED ADDITIONAL COST PRESSURES THAT 279 280A. COULD RESULT IN INCREASED PROJECT COSTS? Yes I have. Additional cost drivers that could impact Project costs include 281 additional capital costs due to schedule delay, additional financing costs due to 10 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 282 schedule delay, costs resulting from a settlement of the current litigation with the 283 Consortium and costs resulting from current, and future change notices received 284 from the Consortium. The cost of schedule delays is potentially one of the largest 285 cost drivers that could increase Project costs as it leads not only to increased 286 direct construction costs but also to additional financing costs. The cost of a one 287 year delay in the Project is in the range of hundreds of millions of dollars. The 288 current Company estimate of $6.2 billion includes schedule delay costs only 289 through November 2016 and 2017 CODs for Units 3 and 4. Although the 290 Company has not acknowledged any cost liability in the current $930 million 291 dollar litigation (100% Owners), it is possible that a settlement of these issues or 292 the outcome of the litigation could result in additional Project costs. The 293 Company could also be faced with future litigation if the Consortium and 294 Company cannot resolve the disputes that may arise as this complex Project 295 296 continues. In addition, the Consortium has submitted numerous potential change 297 notices with the Company that could have significant cost impact. For example, 298 the Consortium has submitted a potential change notice for XXXXXXXXXXX 299 xxxxxxxxxxxx that is estimated at more than $xxxxxxxx. Other potential change 300 notices that could have significant cost impact include: 301 302 303 304 305      xxxxxxxxxxxxxxxxxxxxxxxxxx; xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx; xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx; xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx; xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. 11 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 306Q. PLEASE DESCRIBE THE CONSTRUCTION ACTIVITIES UNDERWAY 307 308A. AT THE VOGTLE PROJECT SITE. A large number of both safety related (nuclear island related) and non-safety 309 related activities are underway at the Vogtle Project site. Non-safety related 310 construction activities are progressing well. These include: 311 312 313 314 315      Placement of the Unit 3 Turbine Building foundation; Assembly of the Unit 3 Condenser; Placement of the Unit 3 Cooling Tower foundation; Development of the River Water Intake system; Construction of the 230 kV transmission switchyard. 316 Some safety related activities including fabrication of the Containment Vessel 317 Bottom Heads for Units 3 and 4 and construction of the Unit 3 Containment 318 Vessel Lower Ring, although behind the original schedule, are progressing well. 319 However, a key critical path activity, placement of the nuclear island foundation, 320 an activity called First Nuclear Concrete (“FNC”) has been delayed many times 321 from the original scheduled date of October 2011. The initial delay was the result 322 of the Consortium’s failure to receive approval of the Design Control Document 323 (“DCD”) from the NRC in a timely manner.4 The delays in FNC are discussed in 324 the next section of my testimony. Another key critical path activity is assembly of 325 structural modules in the Module Assembly Building (“MAB”). Structural 326 modules are assembled in the MAB from sub-modules fabricated at Shaw 327 Modular Solutions in Lake Charles, Louisiana. Module assembly activities were 104 The Design Control Document contains the basic design of the AP1000. The DCD must be approved by 11the NRC before a COL can be issued to a utility allowing safety related construction to begin at the nuclear 12power plant site. 12 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 328 halted in August 2012 due to a lack of delivery of sub-modules to the site and 329 330 have not yet resumed. The Vogtle Project construction site is being maintained in a neat and 331 orderly fashion. Worker safety is a top priority and continuously emphasized by 332 Company and Consortium management. 333 IV. REVIEW OF CONSORTIUM PERFORMANCE 334Q. HOW WOULD YOU CHARACTERIZE PERFORMANCE OF THE 335 336A. CONSORTIUM AT THIS POINT IN THE PROJECT? While the Consortium has made good progress in the design and construction of 337 some non-safety related structures such as the turbine building and cooling 338 towers, I would characterize the performance of the Consortium to date in certain 339 340Q. key safety-related activities that are on the critical path as unsatisfactory. PLEASE PROVIDE SUPPORT FOR YOUR CHARACTERIZATION OF 341 342A. THE CONSORTIUM’S PERFORMANCE. My characterization of Consortium performance as unsatisfactory is supported by 343 my review of the Consortium’s performance of key critical path activities 344 including placement of First Nuclear Concrete, fabrication of sub-modules and 345 assembly of structural modules, development of the detailed plant design in a 346 timely manner that meets the licensing basis and conduct of critical QA source 347 348 349 inspections of safety related material. FNC Placement Placement of FNC is a critical path activity and a major milestone identified in the 350 EPC Agreement. Steps leading up to FNC include receipt of the COL which 351 occurred in February 2012 and installation of an extensive amount of rebar on the 13 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 352 nuclear island mudmat. The installed rebar must be in accordance with applicable 353 civil engineering codes and conform to the design specified in the Design Control 354 Document approved by the NRC. The scheduled date for FNC following receipt 355 356 of the COL was xxxxxxxxxxxxxx. Rebar installation began shortly after the COL was issued and was 357 progressing well until March, 2012 when an NRC inspector found that the rebar 358 being installed did not match the rebar design shown in the DCD. It is 359 disconcerting that the rebar deficiency was found by an NRC inspector. FNC was 360 initially delayed to xxxxxxxxxxx as this issue was evaluated. Subsequently, FNC 361 was further delayed to mid-xxxxxxxxxxx to allow for revision of the rebar design 362 to agree with the DCD, removal of some of the previously installed rebar and 363 installation of more than 800 rebar splices (called cadwelds) to bring the installed 364 rebar into design conformance with the DCD. Subsequent delays in FNC include: 365 366 367    Delayed to xxxxxxxxxxxxxx from xxxxxxxxxxxxxxxxxx; Delayed to xxxxxxxxxxxxxxxx (from xxxxxxxxxxxxxxxxxxx; Delayed to xxxxxxxxxxxxxxxxxxxxxxx (from xxxxxxxxxxxxxxxxx 368 369 370   xxxxxxxxxxx; Delayed to xxxxxxxxxxxxxxxx (from xxxxxxxxxxxxxxxxxxxxxx); Delayed to xxxxxxxxxxxxxxx (from xxxxxxxxxxxxxxxxxxxxx  xxxxxxxxxx Delayed to xxxxxxxxxxxxxxxxxxxxxxxx estimate from xxxxxxxx 371 372 373 xxxxxxxxxxxxxxxx 14 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 374 During this time period other rebar issues were identified including receipt 375 and installation of rebar that did not meet the bend radius requirement and 376 377 identification of an issue with the design of the shear reinforcement rebar. In summary, rebar installation which was originally scheduled to take 3 378 months will take at least 10.5 months and result in a 7.5 month delay. This delay 379 of 7.5 months from May 15, 2012 to December 28, 2012 on a key critical path 380 activity and the discovery of design and material issues by the NRC is a prime 381 example of unsatisfactory performance by the Consortium. Note that the failure 382 of the rebar design to conform to the DCD has far wider implications as discussed 383 384 385 below under “Development of Detailed Design Packages.” Design, Fabrication and Assembly of Structural Modules The Consortium’s inability to design, fabricate and assemble structural modules to 386 meet the Project schedule is another example of unsatisfactory Consortium 387 388 performance that I would characterize as even worse than their FNC performance. Modular construction techniques are used to fabricate several of the 389 plant’s major structures and were touted as a major advancement over the past 390 nuclear plant design and construction processes where structures were built on- 391 site. These modular construction techniques were intended to lower cost and 392 shorten construction schedules as compared to the prior construction methods. 393 Sub-modules made of steel plates and reinforcing rods are designed by 394 Westinghouse and manufactured at the Shaw Modular Solutions (“SMS”) facility 395 in Lake Charles, Louisiana. Many of these sub-modules are quite large weighing 396 many tons and measuring over 60 feet in length. They are shipped by truck to the 397 Vogtle Project site and then welded together in the MAB to form completed 15 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 398 modules. The largest module which forms the Auxiliary Building, CA20, consists 399 of 72 sub-modules welded into a single structure. When assembly of the module 400 is complete, the module is moved on the heavy haul road to a location near the NI. 401 CA-20 is then set on the NI foundation by the Heavy Lift Derrick. The walls of 402 403 the module are then filled with concrete to complete the structure. Fabrication of the critical CA20 and CA01 sub-modules is far behind 404 schedule due to numerous design, fabrication and quality assurance problems that 405 have been encountered. Major design changes including an increase in the 406 number of Nelson studs and a change in the type of steel used in some sub- 407 modules resulted in significant delays. In some cases SMS found it was 408 impossible to physically construct the sub-module as designed. Time after time 409 410 promised delivery dates of sub-modules to the Vogtle site were missed. When fabrication of some sub-modules was completed, the required 411 quality assurance paperwork was of such poor quality that the completed sub- 412 modules could not be shipped. Quality Assurance (QA) paperwork problems 413 included lost paperwork, missing signatures, and illegible notes. On some 414 occasions, resolution of the quality assurance paperwork issues took longer than 415 fabrication of the sub-module. One extreme example is sub-module xxxxxxxxx, a 416 critical corner sub-module needed for the assembly of CA20. Fabrication of 417 xxxxxxx was completed in April 2012 but as of this writing, this sub-module has 418 419 not yet been shipped to the Vogtle site due to paperwork deficiencies. Another example of unsatisfactory Consortium performance is failure to 420 use the correct type of weld on certain modules. When it was determined that the 421 type of steel for sub-module walls needed to change, the type of weld used in 16 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 422 fabrication should have been changed to a full penetration weld to meet code. 423 This was not done and some modules were fabricated with the wrong type of 424 weld. These modules will require repair at the Vogtle site to meet code before 425 426 they can be used. SMS clearly lacked experience in the nuclear power industry and was not 427 prepared for the rigor and attention to detail required to successfully manufacture 428 429 430 nuclear components. Development of Detailed Design Packages Detailed design packages called Certified for Construction (“CFC”) engineering 431 packages must be developed from the AP1000 Standard Plant Design provided in 432 the DCD. CFC packages are needed to support procurement activities and to 433 allow development of detailed construction work packages. Consortium 434 performance has been unsatisfactory in the timely development of CFC packages 435 and in ensuring that the CFC packages conform to the licensing basis as shown in 436 437 the approved DCD. Throughout 2010, 2011 and 2012 the Consortium consistently failed to 438 meet the schedule for issuance of CFC engineering packages on a monthly basis. 439 The Consortium’s delay in issuance of CFC packages is clearly shown in the 440 graph of planned versus actual CFC package delivery on page 21 of the 441 Company’s xxxxxxxxxxxxxxxxxxxxxx.(Exhibit STF-WRJ-2) This graph shows 442 that per the August 2010 schedule, issuance of slightly more than xxx CFC 443 packages should have been completed by xxxxxxx. As of the xxxxxxxxxxxx 444 xxxxxxxxxxx, approximately xxx or only xxxxx of the CFC packages have been 445 issued some x months after they were scheduled to be complete. However, the 17 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 446 impact of these late deliveries has been mitigated by the slippage in the Project 447 448 schedule. Even more important than the timely issuance of the CFC packages is the 449 requirement for CFC packages to conform to the licensing basis that the NRC 450 approved in issuing the DCD. Lack of conformance to the licensing basis was 451 identified as an issue when the NRC discovered that the nuclear island rebar 452 installation did not agree with the design shown in the DCD. Recognizing that 453 failure of the design to conform to the licensing basis was a significant issue, the 454 Consortium, in conjunction with the Southern Nuclear Company, undertook a 455 review of all documents related to the first year of construction and documents in 456 the site data center. This review was called the Construction to Licensing Basis 457 (“C2LB”) review. Over 30,000 documents were reviewed, resulting in 458 identification of xx required design changes, xxx issues that did not require 459 license amendments and xx issues that require license amendments to resolve. 460 Conformance of the plant design to the licensing basis is critical to safe plant 461 operation and to licensability of the Project. The Consortium’s failure to ensure 462 that the plant design conforms to the licensing basis is a significant performance 463 failure by the Consortium. In spite of theC2LB review, additional issues with the 464 465 466 rebar design have been identified and have further delayed FNC. Conduct of QA Source Inspections Per the EPC Agreement, the Consortium is responsible for conducting inspections 467 of components and material at the manufacturer’s facility prior to shipment to the 468 site. This activity, called source inspection, is conducted by the Consortium’s 469 quality assurance organization. Numerous components and material have been 18 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 470 shipped to the site with quality issues that should have been identified by source 471 inspections at the manufacturer. Examples include: 472 473   Sub-modules from SMS with missing Nelson studs; Rebar from subcontractor Gerdau Ameristeel that did not meet the 474 475  bend radius requirement; Embeds with inadequate stud welding from subcontractor Cives Steel 476 477 Company. Nuclear plants must be constructed of material and components of the 478 highest quality. This quality is ensured in part through adequate inspection at the 479 lowest tier sub-contractor working on safety related components, systems, or 480 structures up through the last sub-contractor prior to shipment to the site. 481 Consortium performance in this area has been unsatisfactory. 482 V. REVIEW OF NRC PERFORMANCE 483Q. PLEASE COMMENT ON THE ROLE OF THE NUCLEAR 484 REGULATORY COMMISSION WITH RESPECT TO THE VOGTLE 485 486A. PROJECT. The role of the NRC is to protect the health and safety of the public by ensuring 487 that the Vogtle Project can be operated safely when completed. The NRC takes 488 their responsibility to protect the health and safety of the public very seriously and 489 their decisions are not influenced by schedule or cost impacts on the Project. 490 Having said that, I have found the NRC to be supportive of the Vogtle Project and 19 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 491 to have adopted new practices to expedite resolution of some issues. Examples 492 include: 493 494 495    Expedited approval of License Amendment Requests (“LAR”); Scheduling of regular weekly meetings to review issues; Discussion of preliminary filings rather than wait for filing of final 496 497  documents; Discussions to reach a common understanding of ITAAC acceptance 498 criteria. 499Q. PLEASE PROVIDE A BRIEF OVERVIEW OF THE 10 CFR PART 52 500 501A. REGULATORY PROCESS. The current regulatory process requires the technology provider to receive 502 approval of the nuclear power plant design (Design Control Document) and the 503 utility to receive its license to construct and operate (Combined License) prior to 504 beginning construction of safety related activities. This process is defined in 10 505 CFR Part 52. The advantage of the Part 52 process is that if the process is 506 followed as intended, it provides design certainty. Lack of design certainty was 507 one of the major contributors to cost overruns during the first round of nuclear 508 construction in the 1970’s and 1980’s. However, the Part 52 process does require 509 510Q. the plant to be built as designed (its design basis). AS YOU STATE ABOVE, IS IT CORRECT THAT FOR THE VOGTLE 511 PROJECT THE NRC HAS EXPEDITED THE LARs NEEDED TO 512 513A. SUPPORT CONSTRUCTION? Yes, the NRC has to date issued every submitted LAR in a timely manner as 514 needed to support the construction schedule of the Vogtle Project. 20 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 515 VI. SCHEDULE ANALYSIS 516Q. HAS THERE EVER BEEN A COMPLETE, FULLY INTEGRATED 517 518A. PROJECT SCHEDULE FOR THE VOGTLE PROJECT? No there has not. Over time the Consortium has continued to add key elements to 519 the Project schedule including critical logic ties, engineering activities and 520 procurement activities linked to the engineering schedule. Staff’s understanding 521 is the Consortium’s current IPS does not include a schedule of fabrication or 522 assembly of sub-modules for the critical structural modules. Since assembly and 523 installation of the structural modules are key critical path activities, an IPS 524 without these activities has no real meaning. That is, it cannot be used to make an 525 526Q. 527A. accurate and reasonable forecast of the CODs for the Project. WHAT IS THE BASIS OF YOUR SCHEDULE ANALYSIS? The basis of my schedule analysis is the schedule duration contemplated in the 528 EPC Agreement. The April 1, 2016 date for Unit 3 GSCD in the EPC Agreement 529 is based on an agreed upon 54-month schedule from FNC. The critical milestone 530 for FNC contained in Exhibit E-2 of the EPC Agreement is xxxxxxxxxxxxxxx. 531 532Q. Fifty four months from xxxxxxxxxxxxxxxxxxxxxxxx, the GSCD for Unit 3. USING FNC AS A CRITICAL MILESTONE, WHAT IS YOUR 533 534A. ASSESSMENT OF THE CURRENT PROJECT SCHEDULE? As of the writing of this testimony, FNC is scheduled to occur in December 2012, 535 some 14 months later than the FNC date in the EPC Agreement. Based on this, I 536 conclude that the current actual delay to the Project is at least14 months. 537 Therefore, ignoring other issues that I discuss later, Unit 3 COD should occur no 21 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 538 earlier than June 2017 based on an actual known and undisputed Project delay to 539 540Q. date. YOU DESCRIBE THE DELAY IN FNC AS THE ACTUAL DELAY THAT 541 HAS OCCURRED TO DATE. ARE THERE OTHER KNOWN DELAYS 542 543A. THAT COULD DELAY UNIT 3 COD BEYOND JUNE 2017? Yes. After achieving FNC, subsequent critical path activities are the setting of 544 structural modules CA20 and CA01. As discussed above, both of these modules 545 546Q. are far behind schedule. WHAT IS THE CURRENT STATUS OF MODULE FABRICATION AND 547 548A. ASSEMBLY? Fabrication and assembly of two critical modules, CA20 and CA01 are far behind 549 schedule. The date to set the completed CA20 module on the NI foundation to 550 support the GSCD from the Level I IPS dated July 23, 20105 is February 9, 2012. 551 As of this writing, of the 72 sub-modules that make up CA20, xx have been 552 shipped to the site, xx are in document review, xx are in fabrication and x is 553 waiting to begin fabrication. Assembly of CA20 in the MAB had started but was 554 halted after 5 sub-modules were assembled due to a lack of delivery of sub- 555 modules needed to continue assembly of CA20. There has been no assembly 556 work in the MAB since August 2012. Assembly of CA20 sub-modules is planned 557 558 to begin in 2013 once a sufficient backlog of sub-modules are on site. The situation for CA01 is even worse. The Company has identified CA01 559 as the “Primary Critical Path” for the Project. CA01 consists of 47 sub-modules 560 of which x have completed fabrication, x are in production, with the remaining 135 The July 23, 2010 IPS is important because it is the first issuance of the IPS with a Unit 3 COD of April 141, 2016 which is the GSCD. Prior IPSs showed a COD of January 2016 for Unit 3 reflecting float in the 15early Project schedules. 22 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 561 sub-modules either on hold or in various stages of pre-fabrication and none have 562 been shipped to the site. The schedule date to set CA01 on the NI foundation to 563 564 support the GSCD is May 9, 2012. It is possible that critical path activities of fabrication, assembly and 565 setting of modules CA20 and CA01 will likely delay the COD more than the 566 current 14 month FNC delay. The last forecast that the Company provided for 567 CA20 “ready for set” is December 2013, some 22 months after the required set 568 date of February 2012 needed to support the Unit 3 GSCD of April 1, 2012. This 569 570Q. forecast was provided in the September 10, 2012 Weekly Metrics report. HAS THE COMPANY PROVIDED AN UPDATED FORECAST OF WHEN 571 MODULES CA20 OR CA01 WILL BE READY TO BE SET SINCE THE 572 573A. SEPTEMBER 10, 2012 WEEKLY METRICS REPORT? No they have not. The reason is that they simply do not have the information 574 needed to provide updated forecasts. At the time of this writing, the Consortium 575 has not provided the Company with accurate and reasonable updated fabrication 576 schedules for the CA20 and CA01 modules. In addition, past schedules provided 577 by the Consortium have proven to be extremely optimistic and unreliable. Until 578 the Company is provided realistic schedules for fabrication and assembly of the 579 required modules, it is not possible to forecast when these critical structures will 580 581Q. be ready. PLEASE SUMMARIZE YOUR CURRENT ANALYSIS OF THE PROJECT 582 583A. SCHEDULE. I believe that the Project is currently at least 14 months late based solely on the 584 delay in FNC. This is based on achieving FNC in December 2012. If FNC is 585 delayed beyond December the Project will be delayed accordingly. I believe that 23 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 586 the Company is correct that the critical path at this time is the fabrication and 587 assembly of structural modules CA20 and CA01. While it is not possible to 588 estimate the amount of delay due to these modules, I believe as explained above 589 that it is possibly greater than the current 14 months due to the FNC delay. 590 Finally, given the performance of the Consortium to date and its inability to meet 591 milestone dates in the key safety-related areas, additional further delays should be 592 anticipated. It is not possible to estimate the amount of these future delays at this 593 594Q. time. COULD THE DELAY IN THE COMMERCIAL OPERATING DATES BE 595 596A. SIGNIFICANTLY LONGER THAN 14 MONTHS? Yes. Many of the upcoming activities on the Project are technically and 597 logistically very challenging. Given the Consortium’s numerous examples of poor 598 performance on many safety related activities to date, it would be reasonable to 599 600Q. assume further schedule expansion. AT THIS TIME CAN YOU GIVE AN ACCURATE FORECAST OF COD 601 602A. FOR THE PROJECT? No, I cannot. With so much uncertainty in the Consortium’s ability to fabricate 603 and assemble structural modules, with so many First of a Kind activities yet to 604 come and given the Consortium’s performance to date, I cannot provide what I 605 believe to be an accurate forecast of COD for the Project. That is why I am 606 607Q. recommending that delay scenarios of 24, 36 and 48 months be evaluated. DO YOU BELIEVE THAT SIGNIFICANT SCHEDULE COMPRESSION 608 609A. CAN BE ACCOMPLISHED TO RECOVER SOME OF THESE DELAYS? No I do not. As I have previously explained the Consortium has not been able to 610 meet any significant critical safety related milestones in accordance with the EPC 24 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 611 schedule. Evidence of this is seen in the status of FNC, module fabrication, and 612 CFC engineering package development. Based on past performance, I see no 613 evidence that the Consortium will be able to perform the remaining First of a 614 Kind construction activities in a shorter duration than projected in the EPC 615 Agreement. 616 VII. OTHER ISSUES AND CHALLENGES 617Q. PLEASE DESCRIBE OTHER FUTURE ISSUES OR CHALLENGES YOU 618 619A. HAVE IDENTIFIED FOR THE VOGTLE PROJECT. The Vogtle Project is the first new nuclear power plant to begin construction in 620 over 30 years. The design is new, the modular construction of nuclear power 621 plants is new, the regulatory environment under 10 CFR Part 52 is new and most 622 of the people involved are new to new nuclear plant construction. Some of the 623 challenges facing the Project include: 624  Development of a realistic IPS that is agreed to and supported by all 625 626  parties; Ensuring that the Project is designed and constructed in accordance  with the design basis; Implementing First of a Kind construction activities including 627 628 629 630 631 632 fabrication and assembly of structural modules and fabrication and  assembly of the Shield Building; Completion of the 875 ITAAC per unit as required to support the Project Schedule; 25 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 633  Resolution of the claim litigation without impacting the Project design 634 635  and construction activities; Management of existing and future change notices from the 636 Consortium. 637 VIII. CONCLUSIONS AND RECOMMENDATIONS 638Q. WHAT ARE YOUR CONCLUSIONS REGARDING THE VOGTLE 3 AND 639 640A. 641 4 PROJECT AT THIS TIME? My conclusions are as follows:  I have found the performance of the Consortium in the critical safety 642 643 related areas to be unsatisfactory. o Key critical path activities including placement of First 644 645 Nuclear Concrete are far behind schedule. o Issuance of critical design information is also far behind 646 schedule and in many cases has not been in conformance 647 648 with the licensing basis defined in the DCD. o Fabrication, delivery and assembly of key structural 649 modules are far behind schedule and the Consortium has 650 not provided a schedule or plan going forward. Assembly 651 of the Auxiliary Building CA20 structural module was 652 halted in August 2012 after only 5 of 72 sub-modules had 653 been assembled. Assembly of the CA01 module has not 654 begun. The schedule impact of these delays is unknown at 655 656 this time but could be significant. The Project is at least 14 months late compared to the Guaranteed 657  Substantial Completion Dates of April 1, 2016 for Unit 3 and April 26 PUBLIC DISCLOSURE Direct Testimony of William R. Jacobs, Jr., Ph.D. Docket No. 29849, Seventh Semi-Annual Vogtle Construction Monitoring Period 658 1, 2017 for Unit 4. Delay in the fabrication and assembly of 659 660 structural modules could result in additional schedule delay. A complete and realistic Integrated Project Schedule that includes  661 all critical project elements including modules and is agreed to and 662 supported by all parties is necessary as soon as possible for prudent 663 664  665 management of the Project. The cost drivers that I have identified including schedule delay and Consortium change notices will result in substantial cost pressure 666 667Q. on the Project. WHAT IS YOUR RECOMMENDATION TO THE COMMISSION BASED 668 669A. ON YOUR ANALYSIS OF THE PROJECT SCHEDULE? I recommend that the Commission order the Staff and Company to work jointly in 670 development of additional delay scenarios of 24, 36 and 48months. 671Q. WHAT IS STAFF’S RECOMMENDATION CONCERNING 672 VERIFICATION AND APPROVAL OF THE COSTS REQUESTED BY 673 THE COMPANY? 674A. Subject to the recommendations of other Staff witnesses, Staff recommends that 675 the costs requested by the Company in this Seventh Semi-Annual Review be 676 verified and approved by the Commission. For purposes of my recommendation, 677 “verification and approval” of costs means a determination that such costs have 678 actually been spent on the Project. 679Q. DOES THIS CONCLUDE YOUR TESTIMONY? 680A. Yes it does. 27 681 EXHIBIT STF-WRJ -1 682 683 Resume of William R. Jacobs, Jr. 16William R. Jacobs, Jr. GDS Associates, Inc. 17Executive Consultant Page 1 of 6 19 684EDUCATION: Ph.D., Nuclear Engineering, Georgia Tech 1971 685 MS, Nuclear Engineering, Georgia Tech 1969 686 BS, Mechanical Engineering, Georgia Tech 1968 687 688ENGINEERING REGISTRATION: Registered Professional Engineer 689 690PROFESSIONAL MEMBERSHIP: American Nuclear Society 691 692 693EXPERIENCE: 694 695Dr. Jacobs has over thirty-five years of experience in a wide range of activities in the electric 696power generation industry. He has extensive experience in the construction, startup and 697operation of nuclear power plants. While at the Institute of Nuclear Power Operation (INPO), 698Dr. Jacobs assisted in development of INPO’s outage management evaluation group. He has 699provided expert testimony related to nuclear plant operation and outages in Texas, Louisiana, 700South Carolina, Florida, Wisconsin, Indiana, Georgia and Arizona. He currently provides 701nuclear plant operational monitoring services for GDS clients. He is assisting the Florida Office 702of Public Counsel in monitoring the development of four new nuclear units in the State of 703Florida. He provides testimony before the Florida Public Service Commission concerning the 704prudence of expenditures for these nuclear units. He has assisted the Georgia Public Service 705Commission staff in development of energy policy issues related to supply-side resources and in 706evaluation of applications for certification of power generation projects and assists the staff in 707monitoring the construction of these projects. He has also assisted in providing regulatory 708oversight related to an electric utility’s evaluation of responses to an RFP for a supply-side 709resource and subsequent negotiations with short-listed bidders. He has provided technical 710litigation support and expert testimony support in several complex law suits involving power 711generation facilities. He monitors power plant operations for GDS clients and has provided 712testimony on power plant operations and decommissioning in several jurisdictions. Dr. Jacobs 713has provided testimony before the Georgia Public Service Commission, the Public Utility 714Commission of Texas, the North Carolina Utilities Commission, the South Carolina Public 715Service Commission, the Iowa State Utilities Board, the Louisiana Public Service Commission, 716the Florida Public Service Commission, the Indiana Regulatory Commission, the Wisconsin 717Public Service Commission, the Arizona Corporation Commission and the FERC. 718 719A list of Dr. Jacobs’ testimony is available upon request. 720 7211986-Present GDS Associates, Inc. 722 723 As Vice-President, Dr. Jacobs directs GDS' nuclear plant monitoring activities and 724 has assisted clients in evaluation of management and technical issues related to 725 power plant construction, operation and design. He has evaluated and testified on 726 combustion turbine projects in certification hearings and has assisted the Georgia 727 PSC in monitoring the construction of the combustion turbine projects. Dr. 18 20 21 22 23 24 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 25William R. Jacobs, Jr. GDS Associates, Inc. 26Executive Consultant Page 2 of 6 28 728 Jacobs has evaluated nuclear plant operations and provided testimony in the areas 729 of nuclear plant operation, construction prudence and decommissioning in nine 730 states. He has provided litigation support in complex law suits concerning the 731 construction of nuclear power facilities. 732 7331985-1986 Institute of Nuclear Power Operations (INPO) 734 735 Dr. Jacobs performed evaluations of operating nuclear power plants and nuclear 736 power plant construction projects. He developed INPO Performance Objectives 737 and Criteria for the INPO Outage Management Department. Dr. Jacobs 738 performed Outage Management Evaluations at the following nuclear power 739 plants: 740 741  Connecticut Yankee - Connecticut Yankee Atomic Power Co. 742  Callaway Unit I - Union Electric Co. 743  Surry Unit I - Virginia Power Co. 744  Ft.Calhoun - Omaha Public Power District 745  Beaver Valley Unit 1 - Duquesne Light Co. 746 747During these outage evaluations, he provided recommendations to senior utility management on 748techniques to improve outage performance and outage management effectiveness. 749 7501979-1985 Westinghouse Electric Corporation 751 752 As site manager at Philippine Nuclear Power Plant Unit No. 1, a 655 MWe PWR 753 located in Bataan, Philippines, Dr. Jacobs was responsible for all site activities 754 during completion phase of the project. He had overall management 755 responsibility for startup, site engineering, and plant completion departments. He 756 managed workforce of approximately 50 expatriates and 1700 subcontractor 757 personnel. Dr. Jacobs provided day-to-day direction of all site activities to ensure 758 establishment of correct work priorities, prompt resolution of technical problems 759 and on schedule plant completion. 760 761 Prior to being site manager, Dr. Jacobs was startup manager responsible for all 762 startup activities including test procedure preparation, test performance and 763 review and acceptance of test results. He established the system turnover 764 program, resulting in a timely turnover of systems for startup testing. 765 766 As startup manager at the KRSKO Nuclear Power Plant, a 632 MWE PWR near 767 Krsko, Yugoslavia, Dr. Jacobs' duties included development and review of startup 768 test procedures, planning and coordination of all startup test activities, evaluation 769 of test results and customer assistance with regulatory questions. He had overall 770 responsibility for all startup testing from Hot Functional Testing through full 771 power operation. 27 29 30 31 32 33 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 34William R. Jacobs, Jr. GDS Associates, Inc. 35Executive Consultant Page 3 of 6 37 7721973 - 1979 NUS Corporation 773 774 As Startup and Operations and Maintenance Advisor to Korea Electric Company 775 during startup and commercial operation of Ko-Ri Unit 1, a 595 MWE PWR near 776 Pusan, South Korea, Dr. Jacobs advised KECO on all phases of startup testing and 777 plant operations and maintenance through the first year of commercial operation. 778 He assisted in establishment of administrative procedures for plant operation. 779 As Shift Test Director at Crystal River Unit 3, an 825 MWE PWR, Dr. Jacobs 780 directed and performed many systems and integrated plant tests during startup of 781 Crystal River Unit 3. He acted as data analysis engineer and shift test director 782 during core loading, low power physics testing and power escalation program. 783 784 As Startup engineer at Kewaunee Nuclear Power Plant and BeaverValley, Unit 1, 785 Dr. Jacobs developed and performed preoperational tests and surveillance test 786 procedures. 787 7881971 - 1973 Southern Nuclear Engineering, Inc. 789 790 Dr. Jacobs performed engineering studies including analysis of the emergency 791 core cooling system for an early PWR, analysis of pressure drop through a 792 redesigned reactor core support structure and developed a computer model to 793 determine tritium build up throughout the operating life of a large PWR. 794 795SIGNIFICANT CONSULTING ASSIGNMENTS: 796 797Georgia Public Service Commission – Selected as the GPSC’s Independent Construction 798Monitor for the Plant Vogtle 3 and 4 nuclear construction projects. Assists the Commission staff 799in providing oversight of all aspects of the Plant Vogtle 3 and 4 project. Provides testimony in 800the semi-annual hearing before the GPSC on the Vogtle project. 801 802South Carolina Office of Regulatory Staff – Assisted the South Carolina Office of Regulatory 803Staff in evaluation of South Carolina Electric and Gas’ request for certification of two AP1000 804nuclear power plants at the V.C. Summer site. 805 806Florida Office of Public Counsel – Assists the Florida Office of Public Counsel in monitoring the 807development of four new nuclear power plants in Florida including providing testimony on the 808prudence of expenditures. 809 810East Texas Electric Cooperative – Represented ETEC on the management committee of the Plum 811Point Unit 1 a 650 Mw coal-fired plant under construction in Osceola, Arkansas and represents 812ETEC on the management committee of the Harrison County Power Project, a 525 Mw 813combined cycle power plant located near Marshall, Texas. 814 36 38 39 40 41 42 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 43William R. Jacobs, Jr. GDS Associates, Inc. 44Executive Consultant Page 4 of 6 46 815Arizona Corporation Commission – Evaluated operation of the Palo Verde Nuclear Generating 816Station during the year 2005. Included evaluation of 11 outages and providing written and oral 817testimony before the Arizona Corporation Commission. 818 819Citizens Utility Board of Wisconsin – Evaluated Spring 2005 outage at the Kewaunee Nuclear 820Power Plant and provided direct and surrebuttal testimony before the Wisconsin Public Service 821Commission. 822 823Georgia Public Service Commission - Assisted the Georgia PSC staff in evaluation of Integrated 824Resource Plans presented by two investor owned utilities. Review included analysis of purchase 825power agreements, analysis of supply-side resource mix and review of a proposed green power 826program. 827 828State of Hawaii, Department of Business, Economic Development and Tourism – Assisted the 829State of Hawaii in development and analysis of a Renewable Portfolio Standard to increase the 830amount of renewable energy resources developed to meet growing electricity demand. Presented 831the results of this work in testimony before the State of Hawaii, House of Representatives. 832 833Georgia Public Service Commission - Assisted the Georgia PSC staff in providing oversight to 834the bid evaluation process concerning an electric utility’s evaluation of responses to a Request 835for Proposals for supply-side resources. Projects evaluated include simple cycle combustion 836turbine projects, combined cycle combustion turbine projects and co-generation projects. 837 838Millstone 3 Nuclear Plant Non-operating Owners – Evaluated the lengthy outage at Millstone 3 839and provided analysis of outage schedule and cost on behalf of the non-operating owners of 840Millstone 3. Direct testimony provided an analysis of additional post-outage O&M costs that 841would result due to the outage. Rebuttal testimony dealt with analysis of the outage schedule. 842 843H.C. Price Company – Evaluated project management of the Healy Clean Coal Project on behalf 844of the General Contractor, H.C. Price Company. The Healy Clean Coal Project is a 50 megawatt 845coal burning power plant funded in part by the DOE to demonstrate advanced clean coal 846technologies. This project involved analysis of the project schedule and evaluation of the impact 847of the owner’s project management performance on costs incurred by our client. 848 849Steel Dynamics, Inc. – Evaluated a lengthy outage at the D.C. Cook nuclear plant and presented 850testimony to the Indiana Utility Regulatory Commission in a fuel factor adjustment case Docket 851No. 38702-FAC40-S1. 852 853Florida Office of Public Counsel - Evaluated lengthy outage at Crystal River Unit 3 Nuclear 854Plant. Submitted expert testimony to the Florida Public Service Commission in Docket No. 855970261-EI. 856 45 47 48 49 50 51 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 52William R. Jacobs, Jr. GDS Associates, Inc. 53Executive Consultant Page 5 of 6 55 857United States Trade and Development Agency - Assisted the government of the Republic of 858Mauritius in development of a Request for Proposal for a 30 MW power plant to be built on a 859Build, Own, Operate (BOO) basis and assisted in evaluation of Bids. 860 861Louisiana Public Service Commission Staff - Evaluated management and operation of the River 862Bend Nuclear Plant. Submitted expert testimony before the LPSC in Docket No.U-19904. 863 864U.S. Department of Justice - Provided expert testimony concerning the in-service date of the 865Harris Nuclear Plant on behalf of the Department of Justice U.S. District Court. 866 867City of Houston - Conducted evaluation of a lengthy NRC required shutdown of the South Texas 868Project Nuclear Generating Station. 869 870Georgia Public Service Commission Staff - Evaluated and provided testimony on Georgia Power 871Company's application for certification of the Intercession City Combustion Turbine Project 872Docket No. 4895-U. 873 874Seminole Electric Cooperative, Inc. - Evaluated and provided testimony on nuclear 875decommissioning and fossil plant dismantlement costs - FERC Docket Nos. ER93-465-000, etal. 876 877Georgia Public Service Commission Staff - Evaluated and prepared testimony on application for 878certification of the Robins Combustion Turbine Project by Georgia Power Company - Docket 879No. 4311-U. 880 881North Carolina Electric Membership Corporation - Conducted a detailed evaluation of Duke 882Power Company's plans and cost estimate for replacement of the Catawba Unit 1 Steam 883Generators. 884 885Georgia Public Service Commission Staff - Evaluated and prepared testimony on application for 886certification of the McIntosh Combustion Turbine Project by Georgia Power Company and 887Savannah Electric Power Company - Docket No. 4133-U and 4136-U. 888 889New Jersey Rate Counsel - Review of Public Service Electric & Gas Company nuclear and fossil 890capital additions in PSE&G general rate case. 891 892Corn Belt Electric Cooperative/Central Iowa Power Electric Cooperative - Directs an operational 893monitoring program of the Duane Arnold Energy Center (565 Mwe BWR) on behalf of the non894operating owners. 895 896Cities of Calvert and Kosse - Evaluated and submitted testimony of outages of the River Bend 897Nuclear Station - PUCT Docket No. 10894. 898 899Iowa Office of Consumer Advocate - Evaluated and submitted testimony on the estimated 900decommissioning costs for the Cooper Nuclear Station - IUB Docket No.RPU-92-2. 54 56 57 58 59 60 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com 61William R. Jacobs, Jr. GDS Associates, Inc. 62Executive Consultant Page 6 of 6 64 901 902Georgia Public Service Commission/Hicks, Maloof& Campbell - Prepared testimony related to 903Vogtle and Hatch plant decommissioning costs in 1991 Georgia Power rate case - Docket No. 9044007-U. 905 906City of El Paso - Testified before the Public Utility Commission of Texas regarding Palo Verde 907Unit 3 construction prudence - Docket No. 9945. 908 909City of Houston - Testified before Texas Public Utility Commission regarding South Texas 910Project nuclear plant outages - Docket No. 9850. 911 912NUCOR Steel Company - Evaluated and submitted testimony on outages of Carolina Power and 913Light nuclear power facilities - SCPSC Docket No. 90-4-E. 914 915Georgia Public Service Commission/Hicks, Maloof& Campbell - Assisted Georgia Public 916Service Commission staff and attorneys in many aspects of Georgia Power Company's 1989 rate 917case including nuclear operation and maintenance costs, nuclear performance incentive plan for 918Georgia and provided expert testimony on construction prudence of Vogtle Unit 2 and 919decommissioning costs of Vogtle and Hatch nuclear units - Docket No. 3840-U. 920 921Swidler& Berlin/Niagara Mohawk - Provided technical litigation support to Swidler& Berlin in 922law suit concerning construction mismanagement of the Nine Mile 2 Nuclear Plant. 923 924Long Island Lighting Company/Shea & Gould - Assisted in preparation of expert testimony on 925nuclear plant construction. 926 927North Carolina Electric Membership Corporation - Prepared testimony concerning prudence of 928construction of Carolina Power & Light Company's Shearon Harris Station - NCUC Docket No. 929E-2, Sub537. 930 931City of Austin, Texas - Prepared estimates of the final cost and schedule of the South Texas 932Project in support of litigation. 933 934Tex-La Electric Cooperative/Brazos Electric Cooperative - Participated in performance of a 935construction and operational monitoring program for minority owners of Comanche Peak 936Nuclear Station. 937 938Tex-La Electric Cooperative/Brazos Electric Cooperative/Texas Municipal Power Authority 939(Attorneys - Burchette & Associates, Spiegel &McDiarmid, and Fulbright &Jaworski) - Assisted 940GDS personnel as consulting experts and litigation managers in all aspects of the lawsuit brought 941by Texas Utilities against the minority owners of Comanche Peak Nuclear Station. 63 65 66 67 68 69 GDS Associates, Inc., 1850 Parkway Place, Suite 800, Marietta, GA30067 (770) 425-8100 (770) 426-0303 – Fax Bill.Jacobs@gdsassociates.com