Delays in Oak Creek Power Plant Allegedly Costs Nearly $500 Million

Read between the lines. 

Weather-related construction delays and other problems have added nearly $500 million to the cost of building two new coal-fired power plants in Oak Creek, the project’s builder, Bechtel Corp., said in claims it has submitted to Wisconsin Energy Corp. (WEC).

The claims were disclosed in a filing with securities regulators by Wisconsin Energy, which says the claims are “without merit.”

Bechtel has already told the Milwaukee utility holding company that it would miss the September 2009 deadline for building the first of the two coal plants. That $2.3 billion plant is now projected to be operational by the end of 2009.

Bechtel said severe weather and labor issues have led to $413 million in higher costs, while other delays in the start of construction in 2005 account for $72 million in higher costs.

Rick White, a Wisconsin Energy spokesman, said the claims submitted by Bechtel don’t qualify as exceptions warranting cost relief under the contract the two companies signed before construction began.

Wisconsin has bad weather for a good chunk of the year.  If Bechtel didn’t factor that into their bid, then they are incompetent.  But I’m willing to bet that the weather only had a minor impact on the cost overruns and that “labor issues” are responsible for the bulk.  When we get a chance to read the actual itemized claims, we’ll see if I’m right.