Power Plant Disputes Ramp Up Across US

Nuclear power plant construction practically came to a halt around the world after the 2010 Japan earthquake that devastated the Fukushima nuclear reactors. Overall US construction also saw a decline during this period, and construction and retrofitting of gas and coal plants across the United States saw a huge increase to compensate for the rise in consumer demand for power. In late 2011, the US government and state lawmakersCoal Power Plantcleared the way for nuclear construction permits to begin again, as well as the continued construction of delayed plants from 2010. These changes in construction levels, as well as changes in regulatory and safety standards, have caused a huge influx of very large “cost overrun” disputes in the industry.

For Interface Consulting, the number of power plant disputes requiring claims and litigation assistance continues to rise. As these projects move into the litigation stage, the costs are often passed on to the consumers and ratepayers. Most projects get buy-in by pitching to lawmakers, taxpayers, and end-users the promise of cost savings on energy bills in the end. Billions of dollars are being invested into new construction and retrofitting across the US based on something that is rarely seen once the huge rise in overruns, schedule delays, and operating costs are factored in.

While some projects get by with minimal extra costs, many of the major construction projects cost two or three times their initial estimates. As such, power plant disputes have become more commonplace as major electrical, gas, coals, nuclear, and hydro plant projects are facing delays and cost overruns. The allocation of these costs and damages are transferred to the ratepayers, or consumers, with the utility companies caught in the middle picking up the tab.

Interface Consulting’s president, Frank G. Adams, PE, indicated that he would expect this trend to continue as power plants increase in size and complexity due to technological advancements.

Comments are closed.