BEFORE THE GEORGIA PUBLIC SERVICE COMMISSION

Transcription

1 BEFORE THE GEORGIA PUBLIC SERVICE COMMISSION IN THE MATTER OF GEORGIA POWER COMPANY NINTH / TENTH SEMI-ANNUALVOGTLE CONSTRUCTION MONITORING REPORT DOCKET NO.: PUBLIC DISCLOSURE DIRECT TESTIMONY AND EXHIBITS OF STEVEN D. ROETGER WILLIAM R. JACOBS, JR., PhD. ON BEHALF OF THE GEORGIA PUBLIC SERVICE COMMISSION PUBLIC INTEREST ADVOCACY STAFF June 0, 0

2 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period Table of Contents I. INTRODUCTION... II. STATUS OF PROJECT... III. SCHEDULE ANALYSIS AND CHALLENGES... IV. RECOMMENDATIONS... Exhibits: 0 STF-SR/WRJ- STF-SR/WRJ- Resume of Steven D. Roetger Resume of William R. Jacobs, Jr., Ph.D.

3 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period I. INTRODUCTION Q. PLEASE STATE YOUR NAMES, TITLES AND BUSINESS ADDRESSES. A. My name is Steven D. Roetger. I am an analyst for the Georgia Public Service Commission. My business address is Washington Street, S.W., Atlanta, Georgia, 0. My name is William R. Jacobs, Jr., Ph.D. I am an executive consultant with GDS Associates, Inc. My business address is 0 Parkway Place, Suite 00, Marietta, Georgia, Q. MR. ROETGER, PLEASE SUMMARIZE YOUR EDUCATIONAL BACKGROUND AND EXPERIENCE. A. I hold a Bachelor of Business Administration degree from Georgia State University. I have been employed by the Georgia Public Service Commission since September of 00, primarily in the capacity as a team member for the Vogtle Unit and Project under Docket No.. Also, I was a Public Interest Advocacy Staff team member for the Vogtle certification, Docket No. 00, and an Advisory team member for various other proceedings. Prior to joining the Georgia Public Service Commission I held various positions in either an accounting or finance capacity for firms in different industries. My resume is included in Exhibit SR/WRJ-. 0 Q. DR. JACOBS, PLEASE SUMMARIZE YOUR EDUCATIONAL BACKGROUND AND EXPERIENCE.

4 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period A. I received a Bachelor of Mechanical Engineering in, a Master of Science in Nuclear Engineering in and a Ph.D. in Nuclear Engineering in, all from the Georgia Institute of Technology. I am a registered Professional Engineer and a member of the American Nuclear Society. I have more than thirty years of experience in the electric power industry including more than twelve years of nuclear power plant construction and start-up experience. I have 0 0 participated in the construction and start-up of seven nuclear power plants in this country and overseas in management positions including start-up manager and site manager. As a loaned employee to the Institute of Nuclear Power Operations ( INPO ), I participated in the Construction Project Evaluation Program, performed operating plant evaluations and assisted in development of the Outage Management Evaluation Program. Since joining GDS Associates, Inc. in, I have participated in rate case and litigation support activities related to power plant construction, operation and decommissioning. I have evaluated nuclear power plant outages at numerous nuclear plants throughout the United States. I served on the management committee during construction of Plum Point Unit, a 0 Megawatts Electric ( MWe ) coal fired power plant. As a member of the management committee, I assisted in providing oversight of the Engineering, Procurement and Construction ( EPC ) contractor for this Project. I have assisted the Georgia Public Service Commission as the Independent Construction Monitor in providing oversight of the Vogtle and Project since August 00. My resume is included in Exhibit STF-SR/WRJ-.

5 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period Q. WHOM ARE YOU REPRESENTING IN THIS PROCEEDING? A. We are representing the Georgia Public Service Commission ( Commission ) Public Interest Advocacy Staff ( Staff ). 0 Q. MR. ROETGER, WHAT IS YOUR INVOLVEMENT WITH THE VOGTLE AND PROJECT? A. Since Docket No. 00, I have been directly involved in the oversight of the Vogtle Unit and Project ( Project ) as part of the Staff team. I have closely monitored the Project with Dr. Jacobs since its inception. I also testified in the Eighth Semi-Annual Vogtle Construction Monitoring ( VCM ) proceeding. Q. DR. JACOBS, WHAT IS YOUR INVOLVEMENT WITH THE VOGTLE AND PROJECT? A. I am the Commission s Independent Construction Monitor ( CM ) for the Project. As such, my duties are to assist the Staff in providing regulatory 0 oversight of all aspects of the Project and to keep the Commission informed of significant Project issues or changes in the projected cost and schedule as they occur. I have presented testimony in the First, Second, Third, Fourth, Fifth, Sixth, Seventh, and Eighth Semi-Annual VCM proceedings describing the construction monitoring activities, the status of the Project and any concerns or significant issues that I identified. Q. WHAT IS YOUR ASSIGNMENT IN THIS PROCEEDING?

6 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period 0 Our assignment is to present the results of the Staff s and CM s Project oversight from certification of the Project to the present with emphasis on the time period covered by the Ninth / Tenth Semi-Annual VCM Report, January, 0 through December, 0. We will describe the current status of the Project and will update the Commission on issues that have the potential to impact the schedule or cost of the Project that have been discussed in prior testimony in this docket and identify any new issues that have arisen since the Eighth Semi-Annual VCM proceeding. Finally, we will make a recommendation regarding the $ million of costs submitted by Georgia Power Company ( Company ) for verification and approval and will address other requests made by the Company in its filing. 0 Q. PLEASE DESCRIBE THE CONSTRUCTION MONITORING PROGRAM THAT THE STAFF AND INDEPENDENT CONSTRUCTION MONITOR HAVE IMPLEMENTED TO MONITOR THE CONSTRUCTION OF THE VOGTLE AND PROJECT. A. The Staff and the CM continue to be very active in monitoring the Project. These activities include monthly meetings with Staff and Company personnel to discuss Project status, regular trips to the Vogtle Project site to observe the monthly EPC meeting and to witness firsthand construction activities and progress. The CM has observed readiness review meetings in which Company and Consortium personnel review the Consortium s plan for key activities. In addition, the CM team has continued its review of the Company s process for handling Project invoices from Westinghouse and Chicago Bridge & Iron ( CB&I ). This includes

7 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period review of the Project cost control procedures and sampling of processed invoices. Other activities conducted by the Vogtle Construction Monitoring team include: 0 0 Review of Weekly Metrics reports issued by the Company; Review of Monthly Project status reports issued by the Company; Review of Monthly EPC status reports; Review of the Company s Semi-Annual VCM Reports; Preparation of discovery requests for additional information as needed following review of the monthly status reports, semi-annual construction monitoring reports or meetings with the Company; Participation in Nuclear Regulatory Commission ( NRC ) public meetings; Review of public correspondence between the Company and the NRC via the NRC website; Review of correspondence between the Consortium and the Company; Review of trade articles and journals related to new nuclear power plant development. Witnessing significant construction activities including: o Units and First Nuclear Concrete; o Units and Setting of Containment Vessel Bottom Heads; o Unit Setting of CA0

8 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period II. STATUS OF PROJECT Q. PLEASE DESCRIBE THE PROJECT SCHEDULE AND COST PRESENTED BY THE COMPANY IN ITS NINTH / TENTH VOGTLE CONSTRUCTION MONITORING REPORT. A. In its th/0 th Vogtle Construction Monitoring Report, the Company states that the forecasted Commercial Operation Dates ( COD ) for Unit and Unit of December 0 and December 0 are unchanged from the th VCM report and remain months beyond the CODs at certification. The total construction and 0 capital cost forecast remains unchanged from the $. billion reported in the th VCM report. Forecasted financing costs have declined by $ million resulting in a forecasted Total Project Cost of $. billion, which is $0 million more than the certified cost. 0 Q. WHAT IS THE STATUS OF THE INTEGRATED PROJECT SCHEDULE ( IPS )? A. Prior to May 0, Staff and the CM had been concerned that the IPS used by the Company and the Consortium to manage the Project lacked detail in several critical areas such as the completion of engineering, fabrication and assembly of the CA0 module and, fabrication and assembly of the Shield Building. In early May 0, the Consortium issued the April 0 IPS that contained these missing elements. This schedule was called a locked down schedule meaning that going forward Project progress would be measured against this schedule. However, this

9 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period IPS only presents detailed Project activities through December 0. Beyond 0, the Consortium has recognized that significant mitigation efforts potentially including, but not limited to, opening up numerous work fronts and double shifting of craft labor, will be required to maintain the current CODs. These mitigation plans were not developed as of the issuance of the locked down schedule and as a result many critical post 0 activities were not updated in the April 0 IPS. The April 0 IPS will be discussed in more detail in the Schedule Analysis section of our testimony. 0 0 Q. WHAT IS THE CURRENT STATUS OF THE PROJECT BUDGET? A. As reported in the Company s th/0 th VCM report, as of December, 0 the Total Project Cost (the Company s share) of $, million was $ million under the February 0 re-forecast budget-to-date amount of $,0 million with Total Construction and Capital Cost being $ million under budget and Total Construction Schedule Finance Cost being $ million under budget. As described in our testimony in the th VCM period, these budget variances are primarily due to timing differences between actual expenditures and the budget and should not impact Total Project Cost. More plainly, the Project is under budget because the Consortium has not completed the milestones necessary to receive milestone payments as anticipated in the Company s current budget. Thus, the Consortium has been paid less at this time than projected by the The Company re-forecasts its budget twice per year; once in February and again in August.

10 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period Company s current budget because they have not accomplished work according to scheduled milestones. 0 Q. WHAT FUTURE RISKS COULD RESULT IN ADDITIONAL COST TO THE PROJECT? A. Among the future risks that could result in additional cost to the Project are: additional schedule delay beyond the current forecasted delayed CODs; the outcome of the current litigation between the Owners and the EPC Consortium; the resolution of current change orders submitted by the Consortium; and, the submittal of potential additional change orders by the Consortium. The costs resulting from additional schedule delay include increased capital cost, financing cost, and replacement fuel cost. The quantification of additional capital, financing, and replacement fuel costs and their impact on ratepayers are addressed in detail in Staff Witness Hayet s testimony. 0 Q. HAS THE COMPANY ALSO IDENTIFIED THE ABOVE AS TANGIBLE RISKS TO THE PROJECT? A. Yes. In the Company s 0 Annual Report under footnote Contingencies and Regulatory Matters the Company states: As construction continues, the risk remains that additional challenges in the fabrication, assembly, delivery, and installation of structural modules, delays in the receipt of the remaining permits necessary for the operation of Plant Vogtle Units and, or other issues could arise and may further impact project schedule and cost. Additional claims by the Contractor or the Company (on behalf of the Owners) are also likely to arise throughout construction. These claims may be resolved through formal and informal dispute resolution

11 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period 0 procedures under the Vogtle and Agreement, but also may be resolved through litigation. The ultimate outcome of these matters cannot be determined at this time. Q. PLEASE DESCRIBE THE CONSTRUCTION PROGRESS THAT HAS BEEN MADE IN THE NUCLEAR ISLANDS DURING THE NINTH / TENTH VCM PERIOD. A. Significant construction progress has been accomplished in the Unit and Unit nuclear islands during 0, the th/0 th VCM period. Accomplishments in the nuclear islands include: 0 Placement of Unit First Nuclear Concrete; Setting the Unit CR0 module (the cradle that holds the Containment Vessel Bottom Head); Setting the Unit Containment Vessel Bottom Head (CVBH); Setting the Unit CA0 module; Receipt of the first Unit Shield Building panels; Completion of the Unit Containment Vessel second and third course rings; Completion of Unit CVBH; Placement of Unit First Nuclear Concrete. Q. PLEASE DESCRIBE CONSTRUCTION ACCOMPLISHMENTS IN THE UNIT AND UNIT NUCLEAR ISLANDS IN 0. 0

12 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period Although not in the th/0 th VCM period, progress has continued in the Project nuclear islands in 0. This progress includes: Setting Unit CA0 module, the Auxiliary Building; Setting the Unit CR0 module; Setting the Unit CVBH. 0 Overall progress on Unit has been generally on time relative to the IPS assumed by the Company in the th VCM and without NRC findings, which indicates the Project is taking advantage of lessons learned from Unit design and construction activities. Staff believes the ability of the Project to internalize and adopt lessons learned could be a key positive for the Project going forward. Q. PLEASE DESCRIBE THE ACCOMPLISHMENTS IN THE BALANCE OF PLANT (NON-NUCLEAR) AREA. A. Significant accomplishments have been made in the Balance of Plant areas which have generally been completed on schedule. During the th/0 th VCM period these include erection of Unit turbine building structural steel, setting of Unit condensers A and C and continuing to make good progress on the construction of Unit cooling tower. Also, work is progressing well with the raw water intake structure and ancillary office and warehouse buildings. 0 Q. WHAT MAJOR COMPONENTS HAVE BEEN RECEIVED AT THE VOGTLE PROJECT SITE DURING THIS PERIOD?

13 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period A. Several large components were received at the Vogtle site during the th/0 th VCM period. These include the Unit A&B Accumulator Tanks, the Unit A&B Core Makeup Tanks, the Unit Reactor Vessel and the Unit Turbine Generator. In addition, in 0 the Unit Reactor Vessel and Unit Turbine Generator were received at the site. 0 III. SCHEDULE ANALYSIS AND CHALLENGES. EVOLUTION OF THE PROJECT SCHEDULE BEGINNING IN JANUARY OF 0 THROUGH J UNE 0, 0 Q. WAS STAFF PROVIDED A FULL IPS THROUGH THE COD DATES OF THE UNITS BY THE COMPANY AT THE BEGINNING OF 0? A. No. From December 0 through April 0 neither the Staff nor the CM received an IPS from the Company. It was the Staff s and CM s understanding that during this period the Consortium only provided six month look-ahead schedules to the Company. The Consortium did, however, have a paper Level IPS on site available for the Company to review. The Level IPS is the most detailed schedule available and it shows all of the thousands of individual activities that are required to be complete for the Project. 0 Q. WHEN DID THE STAFF AND THE CM FIRST RECEIVE AN IPS IN 0?

14 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period A. Staff and the CM received a Level IPS in June 0 with a data date as of May, 0. A Level IPS takes the detailed Level IPS and logically groups those thousands of activities along, for example, structures, systems, processes, and components. 0 Q. IS IT THE STAFF S AND CM S UNDERSTANDING THAT THE LEVEL IPS RECEIVED IN JUNE 0 WAS THE SAME IPS THAT THE COMPANY USED TO DETERMINE THAT THE PROJECT WAS UP TO MONTHS DELAYED AS IT REPORTED IN THE EIGHTH VCM? A. Yes. 0 Q. IN EARLY 0 DID THE CONSORTIUM BEGIN AN EFFORT TO ADD THE REMAINING ENGINEERING ACTIVITIES TO THE IPS? A. Yes. After the release of the IPS dated January, 0 the Consortium began an effort to incorporate more accurate data for critical activities of engineering completion. Additional details in critical Project areas including CA0 submodule fabrication, delivery, and assembly; remaining structural modules fabrication, delivery, and assembly; shield building panel fabrication, delivery, and assembly; and Annex Building early start to support initial energization were incorporated in this schedule. Q. PLEASE DESCRIBE THE ENGINEERING COMPLETION ACTIVITIES.

15 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period A. In early 0, the Project concluded that the IPS did not contain a sufficient level of detail related to the completion of engineering activities. The Consortium began a substantial effort to add the needed engineering detail to the IPS. The Consortium committed to providing the complete Engineering Completion Schedule to the Company by March, 0. However, this effort is taking longer than expected. 0 Q. WHEN DID THE CONSORTIUM COMPLETE THIS EFFORT AND WHEN DID STAFF AND THE CM RECEIVE ITS FIRST REVISED COPY IPS? A. This effort is not complete. The Consortium did however present an April 0 IPS that it termed locked down through December 0. Staff and the CM received a copy of this Level IPS in May 0. Q. WHAT INFORMATION MUST BE INCLUDED IN ORDER TO COMPLETE THE APRIL 0 IPS? A. The mitigation of the balance of activities forecasted to begin in January of 0 through the completion of the Project. 0 Q. DOES THE APRIL 0 IPS SHOW ANY ACTIVITIES BEYOND DECEMBER, 0?

16 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period A. With the exception of inter-connection transmission work, which is the responsibility of the Company, the April 0 IPS shows no activities beyond December, 0. 0 Q. DID THE COMPANY PROVIDE A REASON WHY THE CONSORTIUM DID NOT PROVIDE A SCHEDULE THAT INCLUDED ACTIVITIES THROUGH THE CODs? A. Yes. The Company stated that when the activities described above were incorporated into the IPS it was apparent that significant schedule mitigation was necessary to hold the COD dates and that the Consortium was developing mitigation plans prior to making a full schedule available. As of April 0, the Consortium stated the remaining work on the schedule should be complete within - months. 0 Q. WHY IS THE COMPLETION OF ENGINEERING IMPORTANT AND WHAT ISSUES WERE IDENTIFIED FROM DEVELOPMENT OF THE APRIL 0 IPS? A. The engineering completion schedule identified that hundreds of activities were pushed out past the construction need date due to late engineering which delayed necessary procurement. This in turn pushed out the start and end dates of some construction activities. The Consortium worked to mitigate these schedule impacts during the engineering and procurement phases. However, mitigation of Mitigation refers to efforts deployed to compress activity durations.

17 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period some activities will be required in the construction phase. Since not all of the impacts of late engineering identified during development of the engineering completion schedule have been mitigated, additional potential impacts to the Project IPS exist at this time. 0 Q. YOU STATE ABOVE THAT THE COMPANY AND THE CONSORTIUM CONSIDER THE APRIL 0 IPS TO BE LOCKED DOWN. WHAT IS STAFF S UNDERSTANDING OF THIS TERM? A. Staff s understanding of the term locked down is that this is the schedule to which the Consortium agrees to be measured against. Variances between current forecast completion dates and the dates in the April 0 IPS will be provided and used to measure schedule adherence. Q. DOES THE EPC AGREEMENT CONTAIN ANY PROTECTIONS FOR RATEPAYERS SHOULD THIS LOCKED DOWN SCHEDULE NOT BE MET? A. It is our understanding that, other than the liquidated damages protections in the EPC Agreement, there are no additional protections for ratepayers should the CODs shown in this IPS not be met. 0 Q. DO THE COD DATES IN THE APRIL 0 IPS COINCIDE WITH THE GUARANTEED SUBSTANTIAL COMPLETION DATES ( GSCD ) THE

18 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period 0 CONSORTIUM BELIEVES IT IS ENTITLED TO UNDER THE EPC AGREEMENT? A. No. As of the April 0 Consortium Monthly Project Report, the Consortium continues to present two distinct Project Schedules. The Accelerated Schedule is presented only for Unit and shows a COD of January, 0. This schedule is based on the original certification schedule duration of months from First Nuclear Concrete ( FNC ) plus an additional three months. The Consortium s Fully Impacted Schedule for Unit is shown with a COD of XXXXX and a XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXX 0 Q. WHAT ARE THE STAFF S AND THE CM S PRIMARY CONCERNS WITH THE APRIL 0 IPS? A. First, it was not issued as complete. At this time Staff and the CM have no indication as to the extent of mitigation needed after 0 to maintain the CODs of late 0 and late 0. Second, the schedule portion that was submitted already contains mitigation of some of those activities up to December 0. With mitigation strategies unknown and untested it is difficult for the Staff and the CM to assess the reasonableness of the CODs. The inclusion of mitigation for near term critical path activities also increases the risk that should any of these mitigations not be realized, the Consortium would be forced to further mitigate Includes mitigation strategies for Shield Building design changes, COL delay, and FNC delay i.e. those issues currently being litigated.

19 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period longer term activities which appears to be already problematic given the IPS was not released with post 0 information. As will be discussed below, the current forecast for Nuclear Island civil construction activities to reach elevation 00 /0 has already slipped xxx days from the Company s revised schedule in the th VCM that incorporated a month delay.. ANALYSIS OF UNIT NUCLEAR ISLAND ACTIVITIES FROM JANUARY 0 TO EARLY 0 0 Q. YOU STATE ABOVE THAT SIGNIFICANT WORK HAS BEEN ACHIEVED IN THE UNIT NUCLEAR ISLAND, CORRECT? A. Yes. However, for the most part that work has been delayed relative to the forecasted dates shown in the IPS that the Company used to develop its forecasted CODs in the th VCM. 0 Q. HAVE THE ACTUAL ACTIVITY DELAYS AND FORECASTED ACTIVITY DELAYS INCREASED OVER TIME? A. Yes. Please refer to the table below. This table compares some of the activity forecast dates from the first Level schedule Staff received in 0 with the latest Weekly Metrics forecast dates for the same activities. The third column shows the variance in days. A positive number indicates schedule delay.

20 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period Unit Nuclear Island Path to Elevation 00'/0' Level Schedule Milestone Activity Dated //0* May 0, 0 Weekly Metrics Days Delayed A XXXXXXXXXXXXXXXXXXXXXX //0 //0(A) 0 B XXXXXXXXXXXXXXXXXXXXXX //0 //0(A) C XXXXXXXXXXXXXXXXXXXXXX //0 //0 0 D XXXXXXXXXXXXXXXXXXXXXX //0 //0 E XXXXXXXXXXXXXXXXXXXXXX //0 //0 **//0 IPS shows these activities combined with an end elevations 00'/0'; (A) = Actual date set; *IPS in the th VCM. Q. PLEASE EXPLAIN THE PRIMARY REASONS FOR THESE ACTIVITIES BEING DELAYED. A. As the CM and Staff have reported in previous VCMs, the primary reasons for these delays are as follows: 0 Late design changes to ensure that the design conforms to the licensing basis and meets all technical and code requirements; Late delivery and poor quality of sub-modules that required significant rework at the 'Lake Charles Facility - Vogtle', or Level D storage; Ineffective Quality Assurance Programs, with particular emphasis on the Corrective Action Program, at the Consortium vendors. Q. WHAT IS THE SIGNIFICANCE OF REACHING ELEVATION 00 /0 IN THE NUCLEAR ISLAND ( NI )?

21 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period A. Construction of the Shield Building is on the Project critical path at this time. Shield Building construction cannot begin until concrete placement in the nuclear island reaches these elevations. Q. WHAT IS THE KEY TAKE-AWAY FROM THIS TABLE? A. The table demonstrates that not only have activity durations been expanded but that the rate of expansion has increased over time. For example, the XX 0 XXXXXXXXXXXXXXXXXXXXXXXXXX actually occurred 0 days later than what was forecast in the IPS used by the Company in the th VCM filing; the XXXXXXXXXXXXXXXXXXXXXXXXXXX is forecast to set days later than what was forecast in the IPS used by the Company in its th VCM filing. Q. THE DATA DATES BETWEEN THE TWO IPS SCHEDULES SHOWN IN THE TABLE ABOVE ARE APPROXIMATELY ONE YEAR APART. WAS THE EXPANSION OF THE ACTIVITY DURATIONS SUDDEN OR WAS IT A PATTERN OVER TIME? A. It was a pattern over time. If one were to compare an activity duration completion over a few months it would not have shown a significant change. It is the 0 cumulative effect of the minor delays in each of the months represented in the Table that causes, for example, the last line item to be forecast days late. Q. DOES THE FACT THAT THE CONSORTIUM MUST CONTINUALLY RE-FORECAST NEAR TERM ACTIVITY DURATIONS REFLECT ON 0

22 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period THE CONSORTIUM S ABILITY TO FORECAST PROJECT ACTIVITIES IN A TIMELY MANNER? A. Absolutely. It shows Staff and the CM that the Consortium has difficulty forecasting completion of activities in the short (- months) term and also in the intermediate and long term. 0 Q. FOR ANY OF THE ACTIVITIES SHOWN IN THE TABLE ABOVE, DID THE CONSORTIUM, OR WILL THE CONSORTIUM, INITIATE MITIGATION STRATEGIES? A. For the first two activities the Consortium did deploy mitigation strategies. We believe these strategies had some positive effect. However, the effect was insufficient to recover the entirety of the delay to set each module. For the last three activities, it is Staff s and the CM s understanding that the Consortium is currently deploying mitigation strategies. However, as experience has shown, it is far from certain that mitigation will be successful or even partially successful. 0 Q. IS THERE ADDITIONAL EVIDENCE THAT THE CONSORTIUM HAS DIFFICULTY FORECASTING NEAR TERM ACTIVITIES WITHIN FORECASTED DURATIONS? A. Yes. Please refer to the table below. This table shows the history of the Operations Control Center ("OCC") re-forecasting completion dates for very short term activities. As one can see from the table, Milestone Activities A, B, and C were each re-forecast by the OCC numerous times. Milestone Activity C was

23 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period 0 A B forecast to be complete from / in the Weekly Metrics ( WM ) dated //0 to 'To Be Determined' ( TBD ) in the Weekly Metrics dated /0/0. So within days of forecasting the OCC has gone from a completion date of / to a forecast of To Be Determined. Milestone Activity WM /0 OCC WM / OCC WM / OCC WM /0 OCC WM /0 OCC WM / OCC WM / OCC WM / OCC WM /0 OCC WM / OCC Xxxxxxxxxxxxxxxxxxxxx xxxxx /0* / / / / / / / / / XXXXXXXXXXXXXXXXXX XXXX / / / / / / / / / / Xxxxxxxxxxxxxxxxxxxxxx XXXX TBD / / / / / / / / N/A C *= Activity Complete WM=Weekly Metrics Q. WHAT IS THE SIGNIFICANCE OF THE OCC NOT HAVING THE ABILITY TO ACCURATELY FORECAST COMPLETION OF NEAR TERM CONSTRUCTION ACTIVITIES? A. It is Staff's understanding that the purpose of the OCC is to consolidate all functional areas necessary for completion of construction activities to one location such that these activities can be managed to completion according to forecast dates. It is a state of the art control and monitoring facility intended to ultimately drive schedule adherence by ensuring design, quality, procurement, and execution risks have been resolved in a timely manner so that construction can proceed when intended. The facility is staffed with representatives from all disciplines of the Consortium organization as well as representation from the Company.

24 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period Q. IN STAFF'S OPINION HAS THE OCC BEEN SUCCESSFUL IN MEETING ITS PRIMARY PURPOSE? A. Although it has definitely improved the visibility of activities across all functional areas, the OCC's actual performance has been sporadic to meet forecast activity completion dates. 0 Q. HOW HAS THE CONSORTIUM BEEN ABLE TO MAINTAIN THE CODs WITH THE RECOGNITION OF CURRENT FORECAST DELAYS? A. The Consortium has maintained the current CODs primarily by compressing the duration of onsite Shield Building erection. 0 Q. DO STAFF AND THE CM HAVE RESERVATIONS ABOUT THE CONSORTIUM S ASSUMPTION THAT IT CAN ERECT THE SHIELD BUILDING ONSITE IN A SHORTER TIME PERIOD THAN INITIALLY FORECAST? A. Yes, the Staff and CM have concerns for several reasons. First, the Shield Building is truly a first of a kind ( FOAK ) design, fabricate, and assemble activity. This type of structure has never been built in the world. Second, the Shield Building is an integral component of the defense in depth required by NRC of any nuclear unit. The Shield Building must therefore be constructed to tight tolerances uncommon to other types of civil construction. Third, to date Defense in depth refers to redundant safety trains that reduce the risk of a release of radiation to an acceptable level in the event of a loss of coolant accident.

25 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period many Unit nuclear island activities have not been completed as scheduled. Therefore, to assume that the duration for site erection of the Shield Building can be significantly compressed appears to be unsupportable and speculative given the Consortium s history of delays in fabrication and assembly of sub-modules to full modules, and the Shield Building s first of a kind design. 0 Q. HAS THE COMPANY AGREED WITH THE CONSORTIUM'S ASSERTION IT CAN COMPRESS THE ERECTION OF THE SHIELD BUILDING? A. According to the Company's filing, the CODs are maintained and therefore the Company appears to agree that the Shield Building construction can be compressed. 0 Q. WHAT IS THE SCHEDULE RISK POSED BY THE DIGITIAL INSTRUMENTATION AND CONTROL ( I&C ) DESIGN OF THE AP000? A. No nuclear plant operating in the United States today uses a fully digital control system. Design of the AP000 digital control system is also a First of a Kind activity. As with any first of a kind activity there is a significant risk that design, installation and testing of the digital control systems will take longer than anticipated and will impact the Project schedule. The current schedule to develop the digital control design, that supports the Plant Reference Simulator needed to train and license plant operators, has no float remaining. In addition, there is little

26 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period experience with digital control systems for nuclear power plants within the Consortium, the Company or the NRC. Q. ARE THERE OTHER SCHEDULE RISKS FACING THE PROJECT AT THIS TIME? A. Yes there are. These risks include: 0 Technical difficulties with development of key pieces of equipment in the AP000 design including the canned rotor reactor coolant pumps and the squib valves. The ability of the Company and the Consortium to complete and submit to the NRC the required ITAACs (per unit) needed to receive the 0(g) letter from the NRC. The 0(g) letter certifies that all ITAAC have been successfully completed is required prior to fuel load. The likelihood that startup testing and resolution of problems identified during startup testing will take longer than presently planned. 0 Q. WHAT IS YOUR OVERALL ASSESSMENT OF THE PROJECT SCHEDULE AT THIS TIME? A. The Company and the Consortium face many challenges to meet the current CODs of late 0 for Unit and late 0 for Unit. The Company and Consortium agree that additional mitigation is required to meet these dates. However, this additional mitigation has not been identified and will be developed

27 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period over the next to months. As stated above, the Project's April 0 IPS maintains the current CODs by reducing the duration to construct the Shield Building, a first of a kind structure never before constructed. Activities related to the nuclear island have taken longer than initially planned, not shorter. In 0 addition to construction of the Shield Building in a shorter duration than planned, the Company and the Consortium face other challenges as described above. To meet the April 0 IPS CODs, additional mitigation will need to be identified and successfully implemented by the Company and the Consortium. To put it succinctly, the Company and the Consortium must execute the balance of work containing many mitigation efforts to maintain the April 0 IPS CODs. 0 Q. WHAT FORMS OF SCHEDULE MITIGATION IS STAFF AWARE OF THAT WILL BE USED BY THE COMPANY AND THE CONSORTIUM AND WHAT RISKS COME WITH EACH? A. Schedule mitigation typically involves working additional man hours in a given period with longer and/or additional shifts for a given activity. For example, a night shift could be added to a critical path activity to shorten the duration of that activity. Another form of schedule mitigation is adding more work fronts for a given activity. In this case, additional vendors could be contracted to provide critical components if the initial vendor is not able to meet the Project needs. In addition, some work can be performed at risk under a Preliminary Amendment Request ( PAR ) before final NRC regulatory approval is received for a License Amendment Request. These forms of schedule mitigation all come with risks.

28 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period 0 Adding additional labor and/or shifts to an activity will not reduce the duration for that activity if the required design and material available to support the work is unavailable. In addition, a larger workforce does not often equate to a linear increase in production. Or put another way, a doubling of the labor does not mean there will be a doubling of the output. For example the labor force may become more inefficient due to congestion in work areas or inexperience of newly hired laborers with the required standards of nuclear construction. Opening more work fronts by adding new vendors exposes the Project to risks that the new vendors might not have the robust quality and work processes required for nuclear construction work. Finally, performing construction at risk could be counterproductive if the at risk construction does not ultimately meet regulatory requirements and must be removed. Q WITH REGARD TO OPENING UP WORK FRONTS WHICH ENTITY IS RESPONSIBLE FOR THE FINAL QUALITY OF THAT WORK? 0 A. As the licensee, Southern Nuclear Company ("SNC") is ultimately responsible for all work quality that is safety related and placed in the Units regardless of who performs that work or who is responsible under the EPC Agreement. Appendix B to 0 CFR I Organization states "The applicant shall [emphasis added] be responsible for the establishment and execution of the quality assurance program. The applicant [emphasis added] may delegate to others, such as contractors, agents, or consultants, the work of establishing and executing the quality SNC operates Southern Company s fleet of nuclear units.

29 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period assurance program, or any part thereof, but shall [emphasis added] retain responsibility for the quality assurance program." In this context the 'applicant' is SNC. Q. WHAT IS STAFF'S AND THE CM S EXPECTATION WITH REGARD TO SNC'S OBLIGATIONS UNDER APPENDIX B? 0 A The Staff and CM expect SNC to perform its due diligence and oversight in the selection and review of any new Consortium vendor that is engaged to fabricate, assemble, and/or construct safety related systems, structures, and components. Q. WHY IS THE COMPANY S AND THE CONSORTIUM S DUE DILIGENCE AND OVERSIGHT SO CRITICAL TO THE PROJECT? A. The Company and the Consortium have gained valuable lessons learned via the Lake Charles Facility from contracting with a vendor that was not prepared for the rigor of nuclear construction. Proper due diligence can reduce the risk that a vendor is selected that cannot perform quality fabrication at the production rate that meets construction need dates. If the prior challenges experienced at the Lake Charles Facility are repeated, the Project will experience additional delays. 0 IV. RECOMMENDATIONS Q. WHAT IS YOUR RECOMMENDATION REGARDING VERIFICATION AND APPROVAL OF EXPENDITURES DURING THE th /0th VCM PERIOD?

30 Docket No., Ninth / Tenth Semi-Annual Vogtle Construction Monitoring Period A. We recommend that the expenditures of $ million incurred during the th/0 th VCM be verified and approved. As Staff has previously explained, verification and approval of costs means a determination that such costs have actually been spent on the Project and does not preclude a subsequent disallowance by the Commission. Q. THE COMPANY IN ITS FILING RECOMMENDS THE REMOVAL OF RESPONSES TO STIPULATED QUESTIONS FOR FUTURE VCMS. DO STAFF AND THE CM AGREE WITH THESE RECOMMENDATIONS? 0 A. Yes. Staff and the CM agree with the Company s recommendations to remove required responses to numbers, 0 and. Staff does however reserve the right to request the inclusion of new responses for future VCMs. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes it does.

31 EXHIBIT STF-SR/WRJ- Resume of Steven D. Roetger

32 Resume of Steven D. Roetger Georgia Public Service Commission Analyst Steven D. Roetger Washington Street, S.W. Atlanta, GA 0 Professional Experience Georgia Public Service Commission Atlanta, Georgia 00-Present Analyst Primary responsibilities include monitoring the Vogtle expansion of Units and, attending site visits on a regular basis, participate with the Commission and Company interface, and assist in the preparation of testimony. BCD Travel Atlanta, Georgia Finance Manager Primary responsibilities were to manage financial analysts, generate and review variance analyses, analyze departmental financials, and facilitate the coordination between our group and various internal departments. Key achievements o Elevated team's performance to improve consistency, accuracy, and o timeliness of service Identified client missed revenue opportunities and communicated to Operations for recapture and/or inclusion with future invoicing Key Requirements o Train, motivate, and develop financial analysts to achieve an outstanding level of service and performance o o o o Direct workflow to maintain efficiency and productivity without compromising standards Analyze departmental financials to maximize profitability by reviewing contracts, perform variance analyzes, and ensure complete transaction billing Review complex contracts and interpret for finance reconciliation and billing procedures Prepare client budgets and forecasts Marine Bank of Florida Marathon, Florida Accounting Operations Manager/Bank Officer Primary responsibilities were to manage the Bank's Accounting Department and, as directed by the COO, Deposit Operations' functions. Key achievements o Identified high-risk, time sensitive accounts for dedicated review to significantly reduce financial risk to the Bank o In partnership with the CFO reduced audit management exceptions from to zero year over year o o Key Requirements Launched new wire department procedures to decrease response time, increase capacity, and improve customer service without increasing staff In partnership with the COO implemented the Bank's new ACH operations to enhance existing customer relations, attract new business, and respond in a timely manner to ACH adjustments/returns

33 Resume of Steven D. Roetger Georgia Public Service Commission Analyst o o o o o o o Comprehensive GIL management including reconciliations, adjusting entries, and monthly/annual close Manage and review the activities of accounting and deposit operations personnel responsible for accounts payable, wires, ACH operations, VISA checkcard operations, branch settlements, electronic funds transfers, and check clearing. Establish and refine departmental policies and procedures to improve accuracy and timeliness of reporting, facilitate employee transition, and meet audit requirements Oversee Federal Reserve, FHLB, and IBB correspondent accounts Support the CFO to meet external audit requirements Oversee the Bank's daily cash position to minimize overnight net interest expense Support branch operations by assisting branch managers maintain acceptable internal controls, provide training on Bank reporting procedures, and process exceptions B. Terfloth & Co. (USA) Inc. Atlanta, Georgia -000 Accounting Manager Primary responsibilities were to manage the Branch's Accounting Department with an emphasis on controlling expenses and manage the yearly audit process. Key achievements o Re-established accurate and timely monthly reporting to the Corporate Office o Developed a cash flow forecasting model to assess the Branch's financing needs and negotiated under the President's supervision a working capital credit line to meet those needs Key requirements o Comprehensive G/L management including reconciliations, adjusting entries, and monthly/annual close o Manage the annual audit process o Accounts payable and account receivable o Payroll and annual bonus calculations Bridgetown Grill Restaurants Inc. Atlanta, Georgia - Interim Controller Primary responsibilities were to re-establish a reliable Accounting process and once established facilitate the transition to a new Controller. Key achievements o Established internal controls to better manage purchases, inventories, and reduce cash variances o Developed Accounting procedures for Unit Managers and trained the management staff on those procedures o Assisted the Owner in evaluating an outside purchase offer Key requirements o Comprehensive G/L management including reconciliations, adjusting

34 Resume of Steven D. Roetger Georgia Public Service Commission Analyst o o o entries, and monthly close procedures Coordinate the annual audit process Manage accounts payable and payroll processing Manage credit card transaction procedures to reduce charge backs Turner Broadcasting System Inc. Atlanta, Georgia - Staff Accountant Primary responsibility was to support the Managers with accurate and timely completion of assigned tasks. Key achievements o Partnered with Management to streamline the procedure for The Statement of Cash Flows o Corrected the BPS calculation (the error proved to be insignificant for the time period) o Streamlined governmental reporting and incorporated detailed procedures for each report o Provided a Companywide vacation and sick time accrual analysis Key requirements o Worked, as part of a team, on the Consolidated Financial Statements of TBS, Inc. o Develop various footnotes to the Financial Statements o Provide analysis of accounts for actual to budget and actual to rolling month forecast variances o Provide analysis of, and recommendations for, lease capitalizations o Coordinate with Operating Unit Controllers for the content and timely receipt of Unit financial data o o Prepare debt covenant calculations for issues and provide forecasts with sensitivity analysis Prepare all U.S. Department of Commerce and U.S. Treasury Department statistical reports Software PeopleSoft/n Vision reporting, Kirchman/Bankway and IPS Sendero banking software, MSA accounting software, Excel, Outtask, and Word Education MBA Georgia State University in Finance (0% complete) BBA Georgia State University in Finance with an equivalent in Accounting

35 EXHIBIT STF-SR/WRJ- Resume of William R. Jacobs, Ph.D.

36 William R. Jacobs, Jr. GDS Associates, Inc. Executive Consultant Page of EDUCATION: Ph.D., Nuclear Engineering, Georgia Tech MS, Nuclear Engineering, Georgia Tech BS, Mechanical Engineering, Georgia Tech ENGINEERING REGISTRATION: PROFESSIONAL MEMBERSHIP: Registered Professional Engineer American Nuclear Society EXPERIENCE: Dr. Jacobs has over thirty-five years of experience in a wide range of activities in the electric power generation industry. He has extensive experience in the construction, startup and operation of nuclear power plants. While at the Institute of Nuclear Power Operation (INPO), Dr. Jacobs assisted in development of INPO s outage management evaluation group. He has provided expert testimony related to nuclear plant operation and outages in Texas, Louisiana, South Carolina, Florida, Wisconsin, Indiana, Georgia and Arizona. He currently provides nuclear plant operational monitoring services for GDS clients. Dr. Jacobs was a witness in nuclear plant certification hearings in Georgia for the Plant Vogtle and project on behalf of the Georgia Public Service Commission and in South Carolina for the V.C. Summer and projects on behalf of the South Carolina Office of Regulatory Staff. His areas of expertise include evaluation of reactor technology, EPC contracting, risk management and mitigation, project cost and schedule. He is assisting the Florida Office of Public Counsel in monitoring the development of four new nuclear units in the State of Florida, Levy County Units and and Turkey Point Units and. He also evaluated extended power uprates on five nuclear units for the Florida Office of Public Counsel. He has been selected by the Georgia Public Service Commission as the Independent Construction Monitor for Georgia Power Company s new AP000 nuclear power plants, Plant Vogtle Units and. He has assisted the Georgia Public Service Commission staff in development of energy policy issues related to supply-side resources and in evaluation of applications for certification of power generation projects and assists the staff in monitoring the construction of these projects. He has also assisted in providing regulatory oversight related to an electric utility s evaluation of responses to an RFP for a supply-side resource and subsequent negotiations with short-listed bidders. He has provided technical litigation support and expert testimony support in several complex law suits involving power generation facilities. He monitors power plant operations for GDS clients and has provided testimony on power plant operations and decommissioning in several jurisdictions. Dr. Jacobs represents a GDS client on the management committee of a large coal-fired power plant currently under construction. Dr. Jacobs has provided testimony before the Georgia Public Service Commission, the Public Utility Commission of Texas, the North Carolina Utilities Commission, the South Carolina Public Service Commission, the Iowa State Utilities Board, the Louisiana Public Service Commission, the Florida Public Service Commission, the Indiana Regulatory Commission, the Wisconsin Public Service Commission, the Arizona Corporation Commission and the FERC. GDS Associates, Inc., 0 Parkway Place, Suite 00, Marietta, GA 00 (0) -00 (0) -00 Fax Bill.Jacobs@gdsassociates.com

37 William R. Jacobs, Jr. GDS Associates, Inc. Executive Consultant Page of A list of Dr. Jacobs testimony is available upon request. -Present GDS Associates, Inc. As Executive Consultant, Dr. Jacobs assists clients in evaluation of management and technical issues related to power plant construction, operation and design. He has evaluated and testified on combustion turbine projects in certification hearings and has assisted the Georgia PSC in monitoring the construction of the combustion turbine projects. Dr. Jacobs has evaluated nuclear plant operations and provided testimony in the areas of nuclear plant operation, construction prudence and decommissioning in nine states. He has provided litigation support in complex law suits concerning the construction of nuclear power facilities. Dr. Jacobs is the Georgia PSC s Independent Construction Monitor for the Plant Vogtle and nuclear project. - Institute of Nuclear Power Operations (INPO) Dr. Jacobs performed evaluations of operating nuclear power plants and nuclear power plant construction projects. He developed INPO Performance Objectives and Criteria for the INPO Outage Management Department. Dr. Jacobs performed Outage Management Evaluations at the following nuclear power plants: Connecticut Yankee - Connecticut Yankee Atomic Power Co. Callaway Unit I - Union Electric Co. Surry Unit I - Virginia Power Co. Ft. Calhoun - Omaha Public Power District Beaver Valley Unit - Duquesne Light Co. During these outage evaluations, he provided recommendations to senior utility management on techniques to improve outage performance and outage management effectiveness. - Westinghouse Electric Corporation As site manager at Philippine Nuclear Power Plant Unit No., a MWe PWR located in Bataan, Philippines, Dr. Jacobs was responsible for all site activities during completion phase of the project. He had overall management responsibility for startup, site engineering, and plant completion departments. He managed workforce of approximately 0 expatriates and 00 subcontractor personnel. Dr. Jacobs provided day-to-day direction of all site activities to ensure establishment of correct work priorities, prompt resolution of technical problems and on schedule plant completion. GDS Associates, Inc., 0 Parkway Place, Suite 00, Marietta, GA 00 (0) -00 (0) -00 Fax Bill.Jacobs@gdsassociates.com