Westinghouse Electric Co., which helped drive the development of nuclear energy and the electric grid itself, filed for bankruptcy protection on Wednesday, casting into doubt the future of nuclear plants it’s building.
Diane Cardwell and Jonathan Soble of the New York Times had the news:
The filing comes as the company’s corporate parent, Toshiba of Japan, scrambles to stanch huge losses stemming from Westinghouse’s troubled nuclear construction projects in the American South. Now, the future of those projects, which once seemed to be on the leading edge of a renaissance for nuclear energy, is in doubt.
“This is a fairly big and consequential deal,” said Richard Nephew, a senior research scholar at the Center on Global Energy Policy at Columbia University. “You’ve had some power companies and big utilities run into financial trouble, but this kind of thing hasn’t happened.”
Westinghouse, a once-proud name that in years past symbolized America’s supremacy in nuclear power, now illustrates its problems.
Many of the company’s injuries are self-inflicted, such as a disastrous deal for a construction business that was intended to control costs and instead precipitated the events that led to the filing on Wednesday. Over all, Toshiba has been widely criticized for overpaying for Westinghouse.
The bankruptcy casts doubt on the future of the first new U.S. nuclear power plants in three decades, which were scheduled to begin producing power as soon as this week, but are now years behind schedule.
The four reactors are part of two projects known as V.C. Summer in South Carolina, which is majority owned by SCANA Corp, and Vogtle in Georgia, which is owned by a group of utilities led by Southern Co.
Costs for the projects have soared due to increased safety demands by U.S. regulators, and also due to significantly higher-than-anticipated costs for labor, equipment and components.
Pittsburgh-based Westinghouse said it hopes to use bankruptcy to isolate and reorganize around its “very profitable” nuclear fuel and power plant servicing businesses from its money-losing construction operation.
Westinghouse said in a court filing it has secured $800 million in financing from Apollo Investment Corp, an affiliate of Apollo Global Management, to fund its core businesses during its reorganization.
Anna Nicolaou of the Financial Times notes the company’s storied past:
The 131-year-old company was founded by George Westinghouse, an engineer who rivalled Thomas Edison in driving industrial breakthroughs in the US in the 19th century.
Westinghouse, a New York native who served in the army during the US civil war, landed his first patent — a rotary steam engine — at age 19 and continued to invent for three decades. The Westinghouse company engaged in fierce competition with Edison, dubbed the “war of the electric currents”, with both vying to lead the introduction of electric power transmission systems.
Westinghouse’s alternating-current method, which could send power across far distances and which Edison said would “kill a customer within six months”, eventually won out to become the industry standard, lighting up Chicago’s world fair in 1893.
Under Westinghouse’s watch, his company led the development of innovations ranging from commercial radio broadcasts to electric stoves. He resigned from the company in 1907 and died seven years later.
