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Exhibit 10.05
AGREEMENT

AMENDMENT TO THE ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT BETWEEN
SOUTH CAROLINA ELECTRIC & GAS COMPANY, FOR ITSELF AND AS AGENT FOR THE SOUTH
CAROLINA PUBLIC SERVICE AUTHORITY AND A CONSORTIUM CONSISTING OF WESTINGHOUSE
ELECTRIC COMPANY LLC AND STONE & WEBSTER, INC., FOR AP1000® NUCLEAR POWER PLANTS

THIS AMENDMENT (“October 2015 Amendment”) to the Engineering, Procurement and
Construction Agreement dated May 23, 2008 ("EPC Agreement") for the AP1000 Power
Plants at the Virgil C. Summer Nuclear Generating Station (“Project”) is entered
into this 27th day of October 2015, by and between South Carolina Electric & Gas
Company (“SCE&G”), for itself and as agent for the South Carolina Public Service
Authority (“SCPSA”) (collectively “Owner”) and a consortium consisting of
Westinghouse Electric Company LLC (“Westinghouse”) and CB&I Stone & Webster,
Inc. (“Stone & Webster”) (collectively “Contractor”). Owner and Contractor may
be referred to individually as a “Party” and collectively as the “Parties.”

WHEREAS, Westinghouse has represented to Owner that it intends to acquire the
stock of Stone & Webster from Chicago Bridge & Iron (“CB&I”) (the
“Transaction”); that CB&I will have no further involvement in the Project except
for certain supply agreements; and that Westinghouse intends to hire Fluor
Corporation (“Fluor”) or its affiliate(s) as a subcontracted construction
manager;

In consideration of the mutual promises herein and other good and valuable
consideration, the receipt and sufficiency of which the Parties acknowledge, the
Parties, intending to be legally bound, stipulate and agree as follows:

1.The Parties agree that this October 2015 Amendment will be a binding
obligation between Owner and Westinghouse upon the approval of the boards of
directors of both Owners and the authorization of the board of SCPSA for its
management to execute the necessary documentation and the execution of those
documents, which shall become effective upon the consummation of the Transaction
(“Effective Time”), and in the event the Transaction is not consummated by March
31, 2016, this October 2015 Amendment shall be null and void in all respects.
Westinghouse shall cause its wholly owned subsidiary, Stone & Webster, to
execute this October 2015 Amendment.

2. Contractor hereby grants Owner until November 1, 2016 (“Option Deadline”),
the irrevocable option to exercise an agreement, subject to regulatory
approvals, to amend the EPC Agreement by revising the Contract Price and other
specific aspects of the EPC Agreement, as stated in the amendment that is
attached as Exhibit D (“Option Amendment”). Contemporaneously with the execution
of this October 2015 Amendment, Contractor will execute the Option Amendment.
Thereafter, Owner may, in its sole discretion, implement the Option Amendment by
executing it at any time on or before the Option Deadline. The Option Amendment
will not take effect unless and until Owner executes the Option Amendment,
before

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the Option Deadline, and all conditions precedent to effectiveness stated in the
Option Amendment are satisfied or waived by Owner.

3. Owner agrees to pay Contractor the total sum of $300,000,000 (current year
U.S. Dollars) and increase the Fixed Price Contract Price by said amount.
Further, Contractor agrees to provide Owner with a credit to the Target Price in
the amount of $50,000,000 (current year U.S. Dollars). The net $250,000,000 will
be paid in twelve equal monthly installments beginning five days after the
Effective Time. In exchange, Owner and Contractor agree to a full resolution by
settlement and release of any and all disputes outstanding under the EPC
Agreement or otherwise concerning the Project as of the Effective Time,
including the following:

a.Contractor claims for additional payments for any of the items on Exhibit A,
as well as claims for additional payment for cyber security and the site layout
phase 2 Change Order (Change Order 26).
b.Contractor claims for amounts referenced in letters no. VSP _ VSG_003111, VSP
_ VSG_003115, VSP _ VSG_ 3145, VSP _ VSG_3502 and VSP _ VSG_3522, which totaled
approximately $83,518,046 as of August 21, 2015, as set forth on Exhibit B.
c.Contractor claims for amounts in other cases in which the entitlement is in
dispute, which totaled approximately $29,729,785 as of August 31, 2015, as set
forth on Exhibit B.
d.Contractor claims for amounts in dispute due to billings that have been held
because a Change Order has not been executed, which totaled approximately
$5,565,845 as of August 31, 2015, as set forth on Exhibit B.
e.Contractor claims for all amounts in dispute in cases in which only the timing
is disputed, which totaled approximately $110,190,504 as of August 31, 2015, as
set forth on Exhibit B.
f.Contractor claims for the balance of 10% withheld by Owner in connection with
certain invoices for which the Owner has only paid 90% because the Owner
disputed the invoice
g.Owner claims for refunds in connection with invoiced amounts for which Owner
has paid 90% of the invoiced amount and for which Owner had previously intended
to seek a refund.
h.Owner claims arising out of the employee fuel expense audit and procurement
irregularities.
Subparagraphs a through h do not provide an exhaustive list of all claims,
disputes, and amounts that are satisfied by this October 2015 Amendment, it
being the Parties’ intent that all disputes outstanding under the EPC Agreement
or concerning the Project as of the Effective Time are settled and resolved. By
way of further clarifications, under this October 2015 Amendment, the Parties
waive and settle any and all claims currently pending or threatened by either
Party against the other Party and of any and all claims currently known or
reasonably foreseeable by either Party against the other Party. Whether or not
the Option Amendment becomes effective, all pending Change Orders, and formal
and informal notices of potential Change Orders, including but not limited to
those arising from Uncontrollable Circumstances and Changes in Law, are

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hereby settled and resolved. Each Party represents and warrants to the other
Party that it is not aware of the basis for any other claim against the other,
including but not limited to those arising from Uncontrollable Circumstances and
Changes in Law, and that it is not aware of any facts or circumstances that
could be expected to give rise to a claim, the sole exceptions being those
claims addressed in paragraph 4. For the avoidance of doubt, in the event that
the Option Amendment becomes effective, the $300,000,000 payment and the
$50,000,000 credit to the Target Price set forth in this paragraph 3 will be
part of (and not in addition to) the total Fixed Price amount of $6.082 billion
set forth in the Option Amendment.

The Parties shall execute a mutual release effectuating the provisions of this
paragraph 3.

4.Notwithstanding the foregoing, the Parties have identified on Exhibit C to
this Amendment all work items that they contend are required or contemplated for
the Project but that are not included within the release contained in paragraph
3. Said work items are not resolved, settled or released under this October 2015
Amendment. The Parties shall cooperate in good faith to resolve all such work
items expeditiously so as to not impact the Project. In the event a work item
cannot be resolved, it shall be submitted to the Dispute Resolution Board as
referenced in paragraphs 13 and 16. Similarly, with respect to the cyber
security item listed in Exhibit A, the Parties shall cooperate in good faith to
resolve all issues relating to scope expeditiously. Contractor acknowledges its
obligation to commence and continue work in compliance with current NRC
regulations on cyber security, pending issuance of a Change Order, so as not to
impact the Project schedule, and its obligation to complete the Cyber Security
work within the GSCDs stated in paragraph 6In the event a scope item cannot be
resolved, it shall be submitted to the Dispute Resolution Board as referenced in
paragraphs 13 and 16. Except for the items on Exhibit C and the Time and
Material Work set forth in paragraph 2 of the Option Agreement, the cyber
security item listed in Exhibit A and without waiving its rights concerning
unknown Changes under Article 9 of the EPC Agreement, Contractor is not aware of
any additions to the Scope of Work that will be required for the Project to
reach Substantial Completion.

5.The Contractor acknowledges and agrees that its Scope of Work includes
providing Owner with a Facility that meets the standards of DCD Rev. 19.

6.The Guaranteed Substantial Completion Dates (“GSCDs”) are revised, as follows:
August 31, 2019 for Unit 2 and August 31, 2020 for Unit 3. The Standard
Equipment Warranty Period(s) and the Services Warranty Period(s) shall commence
upon Substantial Completion of each Unit at no additional cost to Owner. To the
extent a Change under Article 9 of the EPC Agreement adversely affects
Contractor’s ability to achieve Substantial Completion as provided in this
paragraph 6, Contractor shall be entitled to equitable adjustment of the EPC
Agreement as appropriate.

7.Section 13.1 of the EPC Agreement is revised to state that Delay Liquidated
Damages for each Unit will commence on the applicable GSCDs stated in
paragraph7, and will be computed as follows:

a.     For the first thirty (30) days following the GSCD: $200,000/day; and

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b.     For the next thirty-one (31) to ninety (90) days: $300,000/day; and
c.         For the next ninety-one (91) to one hundred fifty (150) days: $
400,000/day; and
d.
For the next one hundred fifty-one (151) to seven hundred thirty (730) days:
$500,000/day; and

e.     Seven hundred thirty-one (731) days or beyond: $0/day.

8.The Parties agree to share the loss if either or both Units do not qualify for
production tax credits under Federal law. If a Unit is not “placed in service,”
as that term is used in Section 45J of the Internal Revenue Code, before January
1, 2021, Contractor agrees to reimburse Owner by February 1, 2021, the sum of
$250 million per Unit, expressed as a one-time lump sum payment. For purposes of
this paragraph, the January 1, 2021 date can only be extended for the following
reasons (i) material actions or omissions of Owner that cause a Unit not to
qualify for tax credits; or (ii) extension of the tax credit date by the U.S.
government. If Contractor becomes aware of any actions or omissions of Owner
that Contractor believes may cause a Unit not to qualify for tax credits,
Contractor shall provide Owner with reasonable notice of such actions or
omissions.

9.The maximum amount paid by Contractor to Owner under paragraphs 7 and 8 above
will be limited to $338 million per Unit, if the Option Amendment becomes
effective. In the event the Option Amendment does not become effective, the
maximum amount paid by Contractor to Owner under paragraphs 7 and 8 above will
be limited to $463 million per Unit.

10.Owner will pay Contractor an early completion bonus consisting of
$150,000,000 per Unit for each Unit that is “placed in service,” as that term is
used in Section 45J of the Internal Revenue Code, in advance of January 1, 2021,
if the Option Amendment becomes effective. In the event the Option Amendment
does not become effective, Owner will pay Contractor an early completion bonus
consisting of $275,000,000 per Unit for each Unit that is “placed in service,”
as that term is used in Section 45J of the Internal Revenue Code, in advance of
January 1, 2021. For purposes of this paragraph, the January 1, 2021 date can
only be extended for the following reasons (i) material actions or omissions of
Owner that cause a Unit not to qualify for tax credits; or (ii) extension of the
tax credit date by the U.S. government. If Contractor become aware of any
actions or omissions of Owner that Contractor believes may cause a Unit not to
qualify for tax credits, Contractor shall provide Owner with reasonable notice
of such actions or omissions.

11.The Parties agree that no new Inspection, Tests, Analyses and Acceptance
Criteria (“ITAACs”) have been issued or proposed as of the Effective Time that
would affect the GCSDs or entitle the Contractor to a Change Order.

12.The Parties shall cooperate in good faith to develop a new milestone payment
schedule (“Construction Milestone Payment Schedule”) to include all unpaid or
overpaid amounts. While such good faith efforts are ongoing, Owner agrees to
make payments to Contractor in the amount of $100,000,000 per month for the
first five (5) months following the Effective Time. Said payments shall be in
lieu of all payments for Fixed Price, Firm Price, Target Price and Time and
Material Work. Once developed, Contractor agrees that Owner is to make such
payments to Contractor according to the Construction Milestone Payment Schedule,
instead of the existing Payment Schedules. If the Parties fail to agree to a
Construction Milestone Payment Schedule by the date that is six months from the
Effective Time, the matter shall be referred to the Dispute

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Resolution Board (“DRB”) process for resolution. Unless otherwise agreed by the
Parties, the DRB shall issue its report on the Construction Milestone Payment
Schedule within sixty (60) days. For the 60 day period during which the DRB is
reviewing the Construction Milestone Payment Schedule, Owner shall pay the sum
of $100,000,000 per month in lieu of all other payments, and such payments will
be treated in the same manner as the payments referenced in paragraph 3.

Contractor will continue to invoice Owner according to previous procedures (i.e.
Contractor will provide parallel invoices for Target, T&M, and Firm and Fixed
Price categories) to enable calculation of the amount by which the payments
described in paragraphs 3 and 12 exceed what would otherwise be due Contractor.
After these advance payments cease, the excess or deficit portion of such
advance payments shall be adjusted against future invoices submitted by
Contractor to Owner under the EPC Agreement, at the Owner’s sole discretion.
Actual payments will be trued up to parallel invoices in months 6, 12 or when
the Option Amendment becomes effective.

In the event that the Option Amendment is exercised and takes effect, the actual
payments made under paragraphs 3 and 12 will be deducted from the amount
referenced in section 1 of the Option Amendment. If the Option Amendment does
not take effect, billing procedures for Target and T&M Work scopes will revert
back to the EPC Agreement terms, as amended, incorporating the adjusted terms in
paragraph 3 above, and Firm Price and Fixed Price scopes will continue to be
billed based on the Construction Milestone Payment Schedule. For the avoidance
of doubt, the cash flows of the Construction Milestone Payment Schedule will be
reduced to reflect the lower amounts remaining in the Fixed Price and Firm Price
categories as defined in Exhibit H of the EPC Agreement.

13.Within ten (10) days of establishing the Construction Milestone Payment
Schedule, Owner shall advance a deposit of seventy-five million dollars
($75,000,000) with the Contractor.

a.
After the deposit is made, Owners will not be obligated to pay to Contractor the
disputed portion of any invoiced amounts submitted by Contractor to Owners.

b.
The Parties shall revise the dispute resolution procedures in Article 27 of the
EPC Agreement to eliminate the requirement or ability to institute litigation
during the course of the Project absent a suspension or termination of the EPC
Agreement.

c.
The Parties shall establish a DRB process for the interim, non-final resolution
of disputes, as described more fully in paragraph 16 below and Exhibit E.

d.
Owner agrees to make payment to Contractor within thirty (30) days of any award
entered in favor of Contractor by the DRB.

e.
At Project completion, the deposit amount of $75,000,000 shall be credited
against Owner’s final milestone payment owed Contractor.

14.The definition of “Change in Law” in the EPC Agreement is modified so that a
Change in Law occurs only in case of (a) the formal written adoption by a
Government Authority of a new statute, regulation, requirement or code that did
not exist as of the date of the October 2015 Amendment; or (b) where the NRC is
the involved Government Authority, the NRC’s official issuance or promulgation,
after the date of the October 2015 Amendment, of a final and official

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version of Regulatory Guides (NUREGs), Branch Technical Positions, Standard
Review Plans, Interim Staff Guidance, Bulletins, Orders, or written directives,
in which NRC acknowledges a new regulatory requirement or a change to an
existing requirement that did not apply before the date of the October 2015
Amendment. Where Contractor cannot demonstrate a Change in Law under this
paragraph, Contractor shall also be precluded from claiming that the purported
Change in Law is an Uncontrollable Circumstance.

15.The Parties agree to participate in meetings with the Nuclear Regulatory
Commission ("NRC") and develop strategies in an effort to alleviate issues that
have arisen due to the NRC's inspections at the Project, while still affording
the NRC the ability to conduct appropriate inspections. Owner cannot agree in
advance to adopt the Contractor’s position on every issue, but Owner will work
with Contractor in good faith. In the event the Option becomes effective, Owner
shall have no obligation to pay Contractor for regulatory support associated
with License Amendment Requests or ITAACs, except those that arise due to a
Change. In the event the Option Amendment does not become effective, such
matters shall be submitted to the DRB process established pursuant to this
October 2015 Amendment. For the period of time between the Effective Time and
the Option Deadline, the Parties agree to suspend the DRB process for matters
relating to regulatory support associated with License Amendment Requests and
ITAACs. In the event the Option Amendment does not become effective, the
suspended DRB matters will be administered. If the Option becomes effective,
those matters suspended by the preceding sentence shall be deemed to be included
in the Fixed Price.

16.Consistent with paragraph 13 above, Article 27 of the EPC Agreement is
revised to eliminate the requirement or ability to bring suit during the course
of the Project. The Parties agree to empanel a DRB for the interim, non-final
resolution of disputes in accordance with the Dispute Resolution Agreement that
is attached as Exhibit E.

17.Owner hereby waives and cancels the Chicago Bridge & Iron Parent Company
Guaranty. Owner agrees that Contractor shall be relieved of any obligation to
furnish a parent company guaranty on behalf of S&W under the EPC Agreement.
Owner and CB&I shall execute a mutual release of all claims relating to the EPC
Agreement, the Project, the S&W Parent Guarantee and the CB&I Guarantee.

18.The Parties agree to hold a face-to-face meeting among Owner, Westinghouse,
the President and Chief Executive Officer of Power Systems Company, and Mr.
Shiga Shigenori, the Representative Executive Officer and Corporate Senior
Executive Vice President of Toshiba Corporation (or his successor) to allow
Owner to describe its concerns with the Project to date and to discuss Toshiba's
commitment to completing the Project and to the terms of this Agreement. In
addition, at Owner’s option, Toshiba, Owner, Contractor, and Fluor will hold
quarterly meetings to discuss Project progress.

19.Contractor's profit on any future Change Orders under the EPC Agreement shall
be capped at 7 ¾%.

20.The Parties agree that Article 13.3 is deleted from the EPC Agreement.

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21.The provisions of Section 8.6(d) of the EPC Agreement are revised to provide
that SCE&G or Santee Cooper shall not be required to furnish Contractor with an
irrevocable, standby letter of credit, provided the Credit Rating of SCE&G or
Santee Cooper, as applicable, remains at or above investment grade (Standard and
Poor’s BBB-; Moody’s Baa3). If the Credit Rating of SCE&G or Santee Cooper falls
below investment grade, Contractor may request the letter of credit, and SCE&G
or Santee Cooper must furnish the letter of credit at no expense to Contractor.

22.The Parties agree to cooperate with respect to the involvement of Owner’s
Project consultant and/or Owner’s Engineer with the work scheduled to be done by
Owner’s consultant.

a.
Contractor shall carefully consider all matters raised by the consultant,
however the consultant shall have no authority to direct the Work of Contactor.

b.
Contractor agrees to provide the consultant with access to relevant documents
reasonably requested by the consultant, provided such documents are necessary
for the consultant to complete its work for Owners.

c.
For relevant documents provided under subparagraph (b) above, Contractor may
provide confidential and proprietary documents in redacted form, including
redaction of any pricing information. Contractor will provide unredacted
documents to the consultant, provided Contractor determines in its reasonable
discretion that it is given suitable protections from Owners and/or the
consultant against misuse or further disclosure of such documents.

23.Contractor acknowledges Owner’s right to discuss any and all operational and
project execution issues with the Vogtle owners. Owner is not permitted to
disclose to the Vogtle owners information relating to any disputes, commercial
issues or the terms and conditions of this agreement and any related documents
or agreements.

24.All capitalized terms in this October 2015 Amendment, except for those
defined in this October 2015 Amendment, shall have the meanings given to them in
the EPC Agreement.

25.All provisions of the EPC Agreement not modified, expressly or by necessary
implication, remain in full force and effect. All Exhibit references are to this
October 2015 Amendment.

26.While the Parties acknowledge the existence of various confidentiality
agreements between themselves, they also recognize that certain disclosures must
be made to satisfy various securities laws and for regulatory purposes. Each
Party is free to make such disclosures as it deems prudent, but the disclosing
Party must provide a copy of any intended written disclosure to the other
Parties before such disclosure is made.

27.Upon execution of this October 2015 Amendment, Contractor will provide
written details of its relationship and structure with Fluor, including a scope
of work description, sufficient to allow the Owner to understand the roles and
responsibilities of Fluor on the Project. In the event of a material change in
the relationship, structure, or scope, Contractor will provide details of the

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change. In the event the Option Amendment does not become effective, Contractor
shall submit construction related billings consistent with the existing
provisions of the EPC Agreement.

28.To the extent not prohibited by its existing contracts, Contractor agrees to
afford Owner and Owner’s consultant access to its facilities and those of its
suppliers and subcontractors at any tier, for the purpose of completing Owner’s
consultant’s assessment and monitoring of the Project and the Project Schedule.

29.In the form of Exhibit F, Contractors will provide written consent of Toshiba
Corporation to this October 2015 Agreement, affirming that the corporate
guaranty of Toshiba remains in place, notwithstanding this October 2015
Agreement. This signed exhibit must be provided to Owner’s prior to the
Effective Time.

[Balance of Page Intentionally Blank]

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IN WITNESS WHEREOF, the Parties have duly executed this October 2015 Amendment
to the EPC Agreement as of the date first above written, with Toshiba
Corporation, as the parent corporation of Westinghouse, indicating its express
consent hereto.

SOUTH CAROLINA ELECTRIC & GAS
COMPANY, for itself and as agent for South
Carolina Public Service Authority
By:
/s/Kevin B. Marsh
Name:
Kevin B. Marsh
Title:
Chairman & CEO

WESTINGHOUSE ELECTRIC COMPANY LLC
STONE & WEBSTER, INC.
By:
/s/Danny Roderick
By:
 
Name:
Danny Roderick
Name:
 
Title:
President & Chief Executive Officer
Title:
 

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Exhibit A
 
 
 
 
Count
Issue
Issue Description
Deliverable
29

CAS and PRS Support

Primarily due to delayed design completion, the simulators delivered by the
Consortium (intended to be PRSs) to the Owner do not have the functionality to
support being certified by the Nuclear Regulatory Commission. As a result, the
Owner has had to pursue the CAS alternative due primarily to repeated delays in
ISV testing by the Consortium, which have most recently impacted the completion
of ISV testing in time to support the Owner NRC exams that had been scheduled to
occur in May
2015. This issue puts at risk the Owner’s ability to train and certify operators
in time to support Units 2 and 3 fuel loads.

(1) At no additional cost to Owner, Westinghouse to provide a Commission
Approved Simulator to include: All fixes as identified to support a successful
CAS implementation (fixes delivered, support to install, and fixes to fixes as
necessary); End state deliverable is a simulator ready and capable of conducting
license operator exams

(2) If CAS is unsuccessful, at no additional cost to Owner, WEC to provide: All
ISV/HEDs (Priority 1 and 2 ) fixed and included in a baseline 7+ simulator
capable of closing the ISV ITAAC by June 2017; The HFE/ISV ITAAC should be
closed such that we can answer the question in the NRC Inspection Procedure
IP41502 for PRS “Is the ISV ITAAC closed?” Yes; The simulator must be delivered
to site by June 2017; Success will be measured by successful completion of
Inspection Procedure 41502 by NRC Region II resulting in us having a PRS

(3) If CAS is successful, at no additional cost to Owner, Westinghouse to
provide: All ISV/HEDs (Priority 1 and 2 ) fixed and included in a baseline 8
simulator capable of closing the ISV ITAAC by Mar 2018; The HFE/ISV ITAAC should
be closed such that we can answer the question in the NRC Inspection Procedure
IP41502 for PRS “Is the ISV ITAAC closed?” Yes; The simulator must be delivered
to site by March 2018; Success will be measured by successful completion of
Inspection Procedure 41502 by NRC Region II resulting in us having a PRS.

(4) Commercially, CAS, CAS fixes and BL7+ ITAAC closure (if necessary) is all
part of completion of ISV and delivery of a BL7 simulator and as such is already
a paid for deliverable. As part of that, the BL8 Fuel Load baseline should be
considered the deliverable for CO #19.
30

Design Basis Assessments (5 included in the scope)

Licensing and Regulatory compliance reviews of high risk portions of the AP1000
design is to uncover License and Regulatory noncompliance issues prior to
Construction to preclude delays to Project completion similar to those
encountered during construction of the Nuclear Island basemat in 2012. The
results of these reviews have uncovered License noncompliance issues including
Tier 1 and Tier 2* issues and successfully mitigated them through a Licensing or
design change without adverse impact to the Project schedules. It is likely that
these items would not have been uncovered prior to Construction without the
undertaking of these reviews. It is also likely that, if these items were
uncovered after Construction had commenced, work delays of multiple months would
have been experienced while the issues were resolved. Westinghouse contends that
the AP1000 design is consistent with all requirements of the Licensing Basis and
that assessments are unnecessary.

Westinghouse has charged the Owners for support necessary to perform the
assessments citing that no assessments were necessary. SCE&G believes that the
value of the assessments to the Projects and to Westinghouse have been
demonstrated. In addition to the benefits of reduced schedule and regulatory
risk mentioned above, Westinghouse receives the benefit of independent
assessment of key areas of the AP1000s unique design.

SCE&G requests that Westinghouse move forward with assessments (five additional
assessments are desired) and cover their internal costs such that each Party
participating in the review is responsible for its own cost. In this manner,
each Party shares in the costs and benefits through reduced Project schedule
risk and reduced regulatory risk.
31

WEC home office and site licensing efforts

For Contractor initiated Design Changes, processing Contractor’s desired changes
to the design and licensing basis is resource intensive. The Contractor has
initiated and processed thousands of DCPs and hundreds of LCPs. Changes are made
at the request of the Contractor for convenience or in order to address
challenges within the Contractor’s original design that was purchased by the
Owner under the EPC Agreement. The Owner has incurred considerable cost to
process Contractor’s desired changes to the VCS 2/3 licensing basis. Such
changes are made for the Contractor’s convenience. The EPC did not account for
the changes to the licensing basis requested by the Contractor. The EPC was
based on Owner purchase of a design from the Contractor and the Owner has
incurred costs to allocate resources and obtain additional contract assistance
in order to support Contractor requested changes. In addition, Contractor has
requested reimbursement of expenses for implementing changes to the extent that
work relates to site-specific Tier 1, Tier 2*, COL, or Tech Spec requirements.
An example is the EP ITAAC Table 7.5-1 and 7.5-201 in COL Appendix C. These
tables were cited by the NRC as an EP ITAAC to show required plant equipment to
support EP. This equipment was also described in the DCD and if changed by the
Contractor requires a site specific supporting change to the COL.

Subject to Paragraph 15 of the October 2105 Amendment, Westinghouse should be
responsible for its costs incurred to make changes to the Owner’s Current
Licensing Basis (CLB), attributable to its DCPs and LCPs. This includes efforts
to resolve Owner comments prior to incorporation of change into the VCS 2/3 CLB,
whether made on a draft or final revision of the proposed change package. It is
reasonable to expect that some changes may require multiple comment review
cycles due complexity and number of parties involved. Westinghouse should also
be responsible for its costs incurred for implementing changes to the extent
that work relates to site-specific Tier 1, Tier 2*, COL or Tech Spec
requirements. The Owner will be responsible for Owner-directed changes.
32

WEC’s position on CB&I Service claim against WEC for CV costs (delay and other)

CB&I Services (WEC’s subcontractor) Containment Vessel safety-related Work was
delayed from January 19, 2011 through July 31, 2011. WEC invoiced the Owner
$1,405,811.35 (Target Price). CB&I Services’ work was delayed due to CB&I
Services’ ineffective QA program; Westinghouse and its subcontractors are
required to have a QA program that meets the requirements of the EPC Agreement.
The Owner should not be liable for any charges associated with a delay period
during which CB&I Services had to take actions necessary to meet its contractual
QA program obligations.

WEC should retract this invoice as no longer owed by the Owner. Whatever
settlement WEC reached with CB&I Services associated with this delay should
remain between WEC and its subcontractor. No further invoices will be issued to
Owner related to the costs for schedule delay impacts on the CV unless related
to a Change under Article 9 of the EPC Agreement.
33

Secondary Lab and Sampling Room in Turbine Building

Per Exhibit A of the EPC Agreement, the Turbine Building is to be provided as a
complete structure and finishes inclusive of all equipment, components and
commodities. Consortium's position is that they are entitled to a Change Order
for the completion of Secondary Chemistry Laboratory including utilities (e.g.
gas lines, water lines, faucets, drain lines, electrical outlets) and fixtures
(e.g. sampling panels, fume hood, sinks, high purity water treatment unit) to be
located in the laboratory that interface with multiple plant systems including
the Main AC power System, Waste Water System, Potable Water System,
Demineralized Water System, and the Turbine Building Ventilation System.

The Consortium should supply the secondary chemistry lab furnished to the scope
of supply outlined in the attachment titled “Secondary Chemistry Lab Scope of
Supply” attached to SCE&G letter NND-15-0085 dated February 4, 2015.

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34

Site inspections and Vendor
Inspections by NRC

For site inspections performed by the NRC, because the Contractor is responsible
for design, construction, and testing of the AP1000 and maintains responsibility
for the Facility Information during construction, the Contractor is obligated to
provide knowledgeable personnel to support NRC inspections associated with
design, construction and testing. These personnel may include subject matter
experts whose work location is off site. From time to time, certain inspections
may be generic in nature or rely solely on software/services. For these
inspections it may be most effective, for all parties, to execute the inspection
at the specific Contractor work location. This location may be off site at a
contractor facility. For inspections performed by the NRC at Contractor's vendor
facilities, it is the Owner’s reasonable expectation that the Contractor and
Contractor’s vendors retain responsibility of Vendor inspection support. There
has been no Change in Law since agreement of EPC. In fact, the NRC specifically
identified their intended vendor inspection activities to include ITAAC on
6/27/2007 through SECY-07-0105. The inspections performed at vendors assure
compliance with Appendix B and 10CFR21 as required by procurement documents.
These inspections are not intended to confirm ITAACs but to ensure the
associated QA activities are implemented in accordance with Appendix B.

At no additional cost to Owner, Westinghouse to provide the Owner with all
information requested by NRC inspectors and any information requested by the
Owner to properly prepare for the inspection, in addition to routine oversight.
Westinghouse will need to coordinate with their vendors, as needed, to address
NRC questions related to ITAAC associated activities performed by vendors or
sub-vendors. For any NRC violations requiring licensee response, related to work
activities within Contractor scope, the Contractor will provide information to
Owner as requested by Owner to respond and address the violation. Depending on
significance, these activities may require additional engineering effort or
re-work in the field. For Conditions Adverse to Quality (CAQ) which have been
evaluated for 10 CFR 50.55(e) reportability or are associated with an NRC
Finding, the Contractor is obligated to provide any Causal Analysis which has
been performed for Owner review to support any follow up. The NRC expectation is
that in accordance with 10 CFR 52.99, the Owner considers vendor inspection
findings during ITAAC closure. As such, the Owner expects Contractor to share
information pertaining to vendor/contractor notices of nonconformance identified
by NRC and their resolution to support ITAAC closure. It is also reasonable that
the Contractor share inspection results with the Owner after inspection exit to
ensure the Owner can capture any issues potentially affecting ITAAC into the
Corrective Action Program in a timely manner. Finally, the nature of the
standard plant design obliges the Contractor to successfully manage NRC vendor
inspections to support construction and operation of the first AP 1000 plants.

35

ID/labeling of subcomponents

Labeling of the plant is a Consortium (construction) responsibility as outlined
in the Agreement, related Project Execution Plans, and other related Project
documents. In accordance with Exhibit A.2, titled "Phase II," of the Agreement,
the Consortium is to provide the Owner with "one (1) or two (2) complete AP1OOO
Nuclear Power Plant Units ...except for those items listed in Table 1 as Owner's
Responsibility." This section further describes the AP1000 Nuclear Power Plant
Units as the Standard Plant description as described in Revision 16 of the
AP1000 Design Control Document (DCD). Section 18.8.4.1.9 of Revision 16 of the
AP1000 DCD, titled "Coding and Labeling, states the following as it relates to
labeling of components: “Equipment located in the AP1000 has a unique identifier
and plant descriptive name. The configuration management system includes the
identification of the equipment in the plant. Each component is assigned an
identifier during the design process. The identifier is maintained through
manufacturing, construction, and operation. The components are labeled according
to the assigned identifier. These labels help avoid errors in operating or
working on the wrong equipment and in reporting problems or conditions observed
in the plant. The labels help reduce the training burden for operating and
maintenance personnel. Color, syntax, abbreviations and symbols are consistently
applied. The labels are located in an easily visible location on the component
and are not hidden by insulation, equipment covers, or surrounding equipment.
Labels are fastened to the component to prevent easy detachment of the label."
APP-GW-GZP-002, "AP1000 Component Identification Labeling Procedure" contains
guidance for Project groups to use in developing and affixing component
identification and operator aid labels. This document lays out roles and
responsibilities, label content, label material, and label placement. This
procedure has been reviewed and endorsed by the Owner as an acceptable method
for labeling the AP1000 Plant. Further review of the Project Execution Plans for
System Turnover (APP- GW-GBH-350, Rev. 0) indicate that all system tagging
labeling installation is a pre-requisite responsibility of Construction prior to
turnover to Pre-Operational Testing. This approach is consistent with the
expectations of SCE&G for system turnover and collaboration of station personnel
in the testing and startup activities. In addition, it is the Owner’s
understanding that the current Work In Progress (WIP) MELs exclude the following
equipment types and are not anticipated to be numbered or labeled (note: this
list is not comprehensive): Subcomponents to skids and packages; Components
within I&C and Electrical Cabinets (breakers, switches, and etc.); Fuses (Master
Fuse List required per UFSAR); Pipe Hangers/Snubbers; Electrical equipment
controls (i.e., solenoid valves for equipment).

Consortium to provide a plan outlining the labeling of the V.C. Summer AP1000
Nuclear Power Plant. At no additional cost to Owner, Consortium to label the
V.C. Summer AP1000 Units 2 and 3 in accordance with APP-GW-GZP-002.

36

FPOT/F3POT

The Owner’s position is that the Consortium is responsible for all testing in
accordance with Article 11 of the EPC Agreement. This testing includes the First
Plant Only Test (FPOT) and the First Three Plants Only (F3POT). The Owner
acknowledges that the Consortium made an effort to take credit for the China
FPOT and F3POT and results, but that the NRC was not supportive of this
approach. As a result, the Consortium has incorporated the FPOT and F3POT into
the testing program and schedule to be performed on site for the Units. The
Owner agrees with including this testing in the T&M scope of work in the EPC
Agreement, but does not agree that this testing is outside the EPC Agreement
scope and warrants a change order. The Consortium and Owner positions are
included in VSP_VSG_002399 and NND-13-0486, respectively.

The Consortium to perform the FPOT and F3POT as part of the testing program in
accordance with Article 11 of the EPC Agreement.

37

Timely access to vendor technical manuals.

The Owner needs information turnover to develop the programs, processes and
procedures to operate the plant. Furthermore, the Owner needs those documents
produced and delivered in a timely fashion to facilitate the proper level of
Owner review and acceptance. To date, the flow of engineering information not
directly used to build the plant, i.e. placed in ShawDocs, has been
insufficient. The EPC references in a number of locations that the Consortium
will provide various documentation to the Owner prior to system turnover.
Section A.2 states that “Documentation to be provided by the Contractor to the
Owner as developed for the Facility as listed in Table. 2” and section 3.3.3
states “Contractor shall provide to Owner the necessary inputs, test procedures,
technical manuals, and other Documentation related to forgoing tests.” The Owner
interprets these statements to mean that as the documents are developed to a
revision 0 product, they will be made available to the owner via ShawDocs or
CAPA.

As the documents are developed (revision 0), at no additional cost to Owner,
Westinghouse to make those documents available for Owner review. For example, if
the RCS system design is complete, those documents, to include vendor technical
manuals, should all be available for owner review and acceptance, well before
the system testing has begun. This process should begin immediately.

38

BEACON

The WEC AP1000 reactor Standard Plant design contains a core power distribution
measurement system designated as the Incore Instrumentation System (IIS). The
AP1000 has been designed to use the BEACON system as part of its required
control system. BEACON is an advanced core monitoring and support package.
According to DCD Revision 16, this online core monitoring system provides the
operator with the current allowable operating space, detailed current power
distribution information, thermal margin assessment and operational
recommendations to manage and maintain required thermal margins. It is
understood that the AP1000 Standard Plant initial startup cannot occur without
BEACON hardware and software and, as the AP1000 is designed, it cannot be
operated without BEACON. In addition, per the Agreement, WEC is obligated to
provide to Owner an AP1000 Standard Plant as described in DCD Revision 16. For
the IIS, the system is to be supplied complete and inclusive of all equipment,
components and commodities including any specialty handling tools and equipment
as described in the DCD.

WEC to provide BEACON-DMM hardware and software to support fuel load, startup
testing and operations as part of the EPC Agreement and without additional
charge to the Owner.

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Confidential Trade Secret Information - Subject to Restricted
Procedures                

39

Shield Building Door, Annex, Auxiliary Building, Aircraft Impact Assessment.
The Consortium sent to Owner Notice of Change letters (VSP_VSG_003096 and
VSP_VSG_003450) claiming that a new NRC Rule entitled “Consideration of Aircraft
Impact for New Nuclear Power Reactors” (the AIA Rule) impacts other structures
in the Nuclear Island. Specifically, the Consortium claims that it is required
to make changes to the Annex and Auxiliary Buildings’ wall design, as well as
Annex and Auxiliary and Shield Building doors to comply with the NRC Rule. The
Consortium further claims that this scope of work is outside that of the EPC
Agreement and warrants a change order. The Owner has taken exception to the
Consortium claim in NND-15-0007 and NND-15-0323 based on the availability and
knowledge of the draft AIA Rule prior to execution of the EPC Agreement and the
comprehensive Agreement between the Consortium and the Owner executed on July
11, 2012 and resolving all issues associated with the AIA Rule impact.
Consortium to implement the necessary design and construction changes to the
Shield Building Door and Annex and
Auxiliary Buildings impacted by the AIA Rule in accordance with the EPC
Agreement and July 11, 2012 Agreement

40

Loss of Large Areas of the Plant due to Explosions or Fire Testing
On March 27, 2009, the NRC amended 10 CFR Part 50 and 10 CFR Part 52 with new
requirements to address loss of large areas (LOLAs) of the plant due to
explosions or fires from a Beyond Design Basis Event. The NRC issued Interim
Staff Guidance DCD/COL-ISG-016 to assist new applicants or holders of COLs to
address the LOLA requirements. These requirements were not included in DCD
Revision 16, which is the design basis for the Agreement (Reference 1). In
Reference 2, Owner notified the NRC that changes would be made to a future
revision of the V.C. Summer Units 2 & 3 COLA in accordance with 10 CFR 52.80(d)
and 10 CFR 50.54(hh)(2) to address LOLA. Owner provided the NRC with a
Mitigative Strategies Description (MSD), which described the preoperational
testing required to provide a reasonable confirmation of adequate spent fuel
pool spray coverage. These requirements were incorporated into Owner’s COL
Section 2.D.(12).(e).8 as a license condition. The Consortium has offered to
perform this work for SCE&G as a change order.

Consortium to perform the testing and other work required to meet Owner’s LOLA
obligations under the COL Section
2.D.(12).(e).8 as a license condition at no additional cost to Owner.
41

Pre-Service Testing Program Development, Pre-Service Test Conduct, ITP

The Owner and Consortium have a difference of opinion on the Initial Test
Program scope as related to the following items referenced in VSP_VSG_003669:
1. Pre-service testing, including baseline in-service testing
2. Initial core load and post core load vessel assembly
3. Any spent fuel pool spray flow and makeup testing required to support the
Loss of Large Area (LOLA) Mitigation Strategy Document (reference item 40 on
Commercial List)
4. Cooling Towers testing
5. Preoperational testing for: a. Storm Drains; b. Site-specific Seismic
Monitoring System; c. Offsite AC Power Systems; d. Raw Water System; e. Sanitary
Drain System; f. Fire Brigade Support Equipment; g. Portable Personnel Monitors
and Radiation Survey Instruments; h. Physical Security Plan equipment implied in
UFSAR Section 14.4.5; and, i. External/Offsite Communications The Consortiums
position is that these items are not included in the EPC Agreement scope. The
Owner’s position is that the items above are in the EPC Agreement ITP scope.
Additional ITP expectations include the following:
1. All FPOT and F3POT testing and associated activities to include test
specification and procedure development, material/equipment procurement, test
planning, test scheduling, test performance, data analysis and generation of
final test report. Reference item 36 on Commercial List.
2. All testing associated with “site specific” systems listed in EPC Agreement
Exhibit A, Table 1. Activities to include test specification and procedure
development, material and equipment procurement, test planning, test scheduling,
test performance, data analysis and generation of test report.
3. ASME Pre-service Test Plan development and implementation as noted in the
first section above based on the current revision of the ASME-OM document.
4. Steam Generator Moisture Carryover Test procedure development, material and
equipment procurement, test planning, test scheduling, test performance, data
analysis and generation of test report. Reference item 45 on Commercial List
5. Large Area Testing. Reference item 40 on Commercial List.

Consortium to include all of these items in the ITP at no additional cost to
Owner.

42

Procedure revisions from Technical Specification Upgrade (Owner, WEC 50/50)

This issue deals with LAR 13-037 (Technical Specification Upgrade) and the
Owner’s position that the technical specifications as written were not usable
and would not allow the Owner to successfully operate the plants (reference
NND-14-0479). Technical specification examples were given in NND-14-0479
relating to the Steam Generator Isolation Valves flow path, Reactor Coolant Pump
minimum flow parameters and the Radioactive Effluent Control Program.
Contractor to provide a proposal to APOG for the requested scope per letter
dated October 7, 2015 from APOG with subject: APOG-2015-007 Request for Quote -
Technical Specifications Upgrade Impacts. Scope will be performed in accordance
with and under the terms of an APOG purchase order. In the event the work is not
performed through APOG, Westinghouse to provide technical specifications that
are technically accurate and easily understandable and Contractor to complete
items #1-5 in VSP_VSG_002989.

43
Providing As-Built Drawings

EPC Table 2-1 makes reference to As-Built and As-Designed separately from each
other. Consortium members have verbally communicated that they interpret
As-Built to be the As-Designed document combined with the associated change
documentation. This is not consistent with SCE&G’s understanding of the term
As-Built. WEC procedure APP-GW-GAP-615, Appendix F5 states - To pass release for
the core load and turnover to the Owner, the design shall: The design input
document shall have no open items or unincorporated changes; Design output
documents shall be complete, numeric, and consistently relate to the design
input document. A numeric revision, verified compliance document is required and
shall demonstrate that the design output documents have met all design input
requirements. Design output shall have considered and reconciled the impact from
as built and as-tested conditions that may impact core load. NRC Inspection
Manual, Inspection Procedure 65001, “Inspections of Inspections, Tests, Analyses
and Acceptance Criteria (ITAAC) Related Work”, Attachment 65001.A, requires the
following: 02.04 Review As-Built Deviations / Non-Conformances: a. Review a
sample of documents that were used to identify differences between the
as-designed and as-built SSCs to determine if: i. The difference, if not
corrected to comply with the as-designed conditions, was properly documented and
incorporated in the final as-built drawings.

To preclude any discussion or confusion regarding what may or may not impact
core load, at no additional cost to Owner, WEC to turn over to SCE&G all
documents as described in EPC Table 2-1, in an as-built state, with all changes
and dimensional discrepancies incorporated into the document. Owner understands
the engineering backlog on change paper is growing and immediate actions are
required to be able to deliver “clean paper”. Owner understands that additional
changes may occur after Turnover and is prepared to address processes to handle
these changes.

44
Operating Procedure Configuration Control (Owner to incorporate All
post-Baseline 7 Design Changes)

Westinghouse continues to make design changes to the Facility that effect
standard operating procedures delivered to the Owner. Identification of the
affected procedures is essential to ensure that the operating plant procedures
are consistent with the plant design as required.

At no additional cost to Owner, Westinghouse to identify the impact of all
design changes on operating procedures and provide this information to Owner.

45

Steam Generator Moisture
Carryover Test

Refer to item 41 on Commercial List.

Refer to item 41 on Commercial List.

47

Communication System and BIS Power Allocation
For the Communication System issue, the initial Consortium design did not take
into account the site layout of the plants sold to SCE&G. Designs were for a
single unit and ended at the security fencing. The Consortium's initial position
was that their responsibility for wireless and wired phones, paging system,
radios and networking systems ends at the “fence line.” SCE&G contends that the
Consortium is responsible to extend these systems to the site specific areas
like RWS intake structure, CWS cooling towers, and OWS facility.

For the BIS Power Allocation issue, power allocated for Communications is not
sufficient for SCE&G needs (e.g. powering phones, cameras, etc.). Per design
documents, 48.6kW total power was allocated for both BIS and EFS networks. EFS
would be allocated 35kW with the remaining 13.6kW allocated for BIS. SCE&G
determined that the BIS power use was 38.4kW versus the 13.6kW allotted in the
design.

For the Communication System issue, Consortium letter VSG_VSP_002475 dated
October 9, 2013 established an acceptable DOR addressing the majority of the
issues and site layout change order 26 resolved the remaining issues.

For the BIS Power Allocation issue, Consortium to work with Owner to achieve
adequate BIS power to support SCE&G communication needs at no additional cost to
Owner.

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Confidential Trade Secret Information - Subject to Restricted
Procedures                

49

Site Security System Backup Power

AP1000 Design Change Proposal APP-GW-GEE-2710 “Annex Building Security Features
Update” identifies the back-up duration for the security system to be less than
that identified in APP-GW-GLR-066 “AP1000 Safeguards Threat Assessment” and
section 3.6.9 of NUREG-1793, “Final Safety Evaluation Report Related to
Certification of the AP1000 Standard Design.” The Owner does not accept this
reduction in back-up power reduction as referenced in NND-14-0689.
Westinghouse to provide the required back-up power duration. The Owner is
willing to consider the reduced back-up power duration contingent upon WEC’s
integration of the Plant Security Systems (SES) for Units 2 and 3 (Reference
NND-14-0689).

50

OWS Security Plan
The Offsite Water System (OWS) Treatment Facility includes security and fencing
plans that have been discussed with the Consortium and incorporated in the
pricing for the latest draft Change Order 17 dated May 10, 2015. Correspondence
relating to the OWS Security Plan includes VSP_VSG_001469, NND-11-0444,
VSP_VSG_001605 and NND-12-0034. Incremental OWS security plan costs required to
meet Owner corporate standards became a commercial issue, specifically the
security and fencing requirements and the fire alarm system and fire detection
system. Other OWS commercial issues included in the draft CO 17 are the
numbering and tagging of equipment and coatings and pipe color requirements. It
is noted that the primary OWS change reflected in the draft CO 17 is the
addition of the reverse osmosis system to remove bromides from the water. The
Owner and Consortium negotiated a “no EPC Agreement price increase” change order
for CO 17 which included the OWS security and fencing plans as well as the other
items referenced herein. The draft CO 17 also includes other commercial items
agreed upon by the Owner and Consortium.

That the Consortium complete the installation of the OWS security, fencing and
other items above to the satisfaction of the Owner. CO 17 is addressed in
Commercial List item #70.
55
PEB Design Change
The Consortium and SCE&G could not initially come to agreement on the design
requirements of the Plant Entry Building.
This issue was resolved with the issue of change order 26.

57

Fire Alarm monitoring

Due to the delay in the project schedule, the Owner is concerned about the
increasing value of inventory in the onsite warehouses 20A, 20B and 57 in
relation to the insurability of the warehouses and their content under the
Owner’s Builder’s Risk Policy. Owner has elected to implement enhancements to
the fire alarm monitoring for these warehouses, which includes monitoring of
sprinkler system water flow switches in the three warehouses and interconnecting
the new system to the existing yard fire alarm system. On October 7, 2015, the
Consortium provided to the Owner a draft CO for Owner’s review and comment.

The Consortium to install new local fire alarm control panels in Warehouses 20A
and 57; the flow switches will be monitored locally at each of these 2
warehouses. A new main fire alarm panel will be installed in Warehouse 20B. This
new main fire alarm panel will monitor the Warehouses 20A and 57. The new main
fire alarm panel will be network connected to the existing Siemens fire alarm
system using single mode fiber optic connections. Spare fibers which run between
the buildings shall be assigned for this purpose. All alarms from the new
warehouse fire detection system will be monitored by the existing system’s main
fire alarm panel located in the main plant entry guard shack. Physical
connection with the existing system’s network shall be made at the YFS fire pump
house. The new fire detection system for the three warehouses will be designed
as a Class B system; Class A monitoring is not required to satisfy the
requirements of the authority having jurisdiction codes for these warehouses.

60

Laurens Piping Quality Issues
CB&I Laurens issued a self-imposed Stop Ship on March 12 following a CB&I Power
Audit (V2015-035), which included two Level 1 findings and three Level 2
findings. Most of the issues were repeat Findings from previous
Audits/Surveillances performed by CB&I Power.

CB&I Laurens issued a Stop Work Order (SWO) on all Safety Related (SR) ASME
Section III piping on March 17. The issuance of this SWO was during the March
NRC inspection which found many similar issues documented in the CB&I Audit
(V2015-035). The major issues being addressed by the SWO are CGD and
Qualification of Vendors, Internal and External Audit Programs, Document
Control, and Corrective Action Program.

During CB&I Power Surveillance 2015-172, which occurred in August 2015, the
surveillance team discovered that issues with CGD and Qualification of Vendors
had not been fully addressed by CB&I Laurens. This was also noted as an
indicator that the corrective actions with the CAP had not been fully effective.

July 2015, CB&I Site QC inspection of pipe spools not signed off by Laurens ANI
resulted in an approximate reject rate of 65%. These were due to minimum wall
violations, dimensional issues, and misfabrications. These results have raised
questions on inspection methodologies between Summer, Laurens, Vogtle, and
Source Inspection.

An additional CBI Laurens self-imposed SWO was put in place on 10/09/15
regarding the incorrect VALVES being place in a pipe spool. The preliminary
investigation determined that this does not affect Section III Safety Related
pipe spools and has only effected a single spool. However, this investigation is
only preliminary and a full Extent of Condition has not been performed. In
addition to the Laurens SWO CBI Power has issued QRL restrictions for shipping
of Laurens ASME SR spools unless they are released (after enhanced inspection)
by the CB&I site QA Directors. Currently Pipe Spools have only been released in
phases 1-3 of a 4 phase SWO. No spools will be released to phase 4 until
completion of First Article Survey(FAS) by CB&I Power. Once all Spools are
completed through Phase 4, the SWO will be lifted.

1. Completion of Corrective Actions associated with stop work /stop ship and
lifting of restrictions.
2. Agreement on inspection methodologies between Vogtle, Summer, Laurens, and
Source Inspection.
3. Completion of Enhanced Inspections on post SWO pipe spools performed by VC
Summer QC.
4. Sustainable Improvements in programmatic systems reported from
Audit/Surveillance results performed by CB&I Power.
67
Common Q/Ovation MTS

Owner needs to have an Ovation MTS so Owner can train its technicians and
engineers on Ovation equipment in the Ovation Maintenance and Ovation Core Team
training areas. The Ovation MTS provides an offline environment with a
representative sample of system hardware representing the Distributed Control
and Information System (DCIS). In the plant, the Ovation platform is used for
the Plant Control System, the Data Display and Processing System, and portions
of the Operator Interface of the Operations and Control Centers System
(collectively DCIS). Owner provided a revised scope of work to Westinghouse on
September 9, 2015 and requested an updated cost proposal. [Note: Common Q MTS CO
was in August 2015]
Westinghouse to provide the Ovation MTS, to include the hardware, software,
documentation and support, as described in the revised scope of work, which was
emailed to Westinghouse on September 9, 2015.

69
Path forward to execute CO16

CO#17 provides clarification information for CO#16. If CO #17 is to be executed,
the 2 COs need to be executed together. However, the project schedule upon which
CO#16 was based no longer reconciles with the current working schedule.

1. Reach agreement with Consortium on execution of CO #16 and/or CO #17
2. If CO #16 is executed, determine whether schedule language in CO #16 should
be modified
3. If schedule language needs to be modified, reach agreement with Consortium on
updated language
4. Reach agreement with Consortium on whether Exhibit F schedules should be
included in the CO, specific to CO #16. Consortium has proposed not including
Exhibit F tables, since the information would be stale at the time of CO
execution; instead the impacts of CO #16 to the Exhibit F milestones would be
incorporated into an EPC Amendment.
5. Execute alone or simultaneously with CO #17

70

Path forward to execute CO17

CO#17 provides clarification information for CO#16; If CO #17 is to be executed,
the 2 COs need to be executed together. However, the project schedule upon which
CO#16 was based no longer reconciles with the current working schedule
1. Reach agreement with Consortium on execution of CO #16 and/or CO #17
2. If CO #17 executed, reach agreement with Consortium on whether Exhibit F
schedules should be included in the CO, specific to CO #17 (Tables F.1.6 (f-h)).
Consortium has proposed not including Exhibit F tables, since the information
would be stale at the time of CO execution; instead the impacts of CO #17 to the
Exhibit F milestones would be incorporated into an EPC Amendment.
3. Owner to transmit agreed-to de-escalation process since it is not included in
CO as Owner requested.
4. If executed, execute simultaneously with CO #16

13

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77

TEDV DAQ Funding
Purchase agreement between Westinghouse, Southern and SCE&G is to provide the
data acquisition system and capability to support thermal expansion and dynamic
evaluation of plant components during testing.

Westinghouse to deliver TEDV DAQ in accordance with purchase agreement.

96

Offsite Storage and Lay down – Leases, Equipment, and FNM Per Diem (area 14,
Blythewood, Metro)
During Phase I of the EPC Agreement scope of work, the Owner paid the Contractor
to develop the requirements for all temporary facilities on the Site, to include
warehouses and equipment and material laydown areas. The Contractor developed
the requirements, was given unlimited access to the Site and was in control of
the Target Price budget for construction of the appropriate facilities. The
Contractor now estimates significantly more warehouse facilities and laydown
area space than it originally planned. The Owner contends that this additional
warehouse and laydown area space is attributed to either inadequate planning on
the part of the Contractor or structural module delay. The facilities and
laydown area in question at this point are the Blythewood warehouse facility,
Metro warehouse facility and laydown area 18. The Blythewood warehouse is being
utilized and the lease payments invoiced to the Owner have been disputed. The
Metro facility renovation is essentially complete and ready to receive equipment
and material. The Contractor will begin invoicing the Owner for the lease and
other expenses. The Area 14 laydown area construction has been out for bids by
the Contractor who has been having discussions with the Owner on the invoicing
process. The Contractor claims entitlement to a change order for these warehouse
facilities and laydown area expenses since they are located off-site. The Owner
disagrees and is willing to treat these facilities as target scope work under
the EPC Agreement with no justification for a change order. Also, the Owner’s
position is that CO 8 applies which transferred target dollars to fixed/firm
dollars for items such as construction equipment and field non-manual living
expenses.

The Contractor invoice the Owner for the Blythewood and Metro warehouses and
Area 15 laydown area construction under the Target Price category per the EPC
Agreement, applying the CO 8 cost categories to the invoicing. The total costs
for these facilities and laydown area will remain in dispute per the EPC
Agreement due to the structural module delay with resolution dependent upon
senior executive negotiations.

97

Warranty impact due to delay and specific warranty claims; and extending
warranties based on actual completion dates
The warranty requirements are specified in Article 14 of the EPC Agreement.
Specifically, a 24 month warranty period for Equipment begins upon the actual
Substantial Completion Dates for Units 2 and 3. The presently approved
Guaranteed Substantial Completion Dates for Units 2 and 3 are March 15, 2017 and
May 15, 2018, respectively. The Owner’s position is that the 24 month warranty
period and other warranty provisions in the EPC Agreement should be effective
upon the actual Substantial Completion dates due to the structural module delay
impact on the Project Schedule. Also, there are specific warranty claims that
the Consortium is responsible for resolving. For example, the Units 2 and 3
Switchyard has experienced component failures, specifically related to
capacitors, as noted in Owner correspondence NND-14-0335, NND-14-0337,
NND-14-0514 and NND-14-0627. Other components also sustained damages, but were
replaced by the Consortium with extended warranties (reference VSP_VSG_002978).
The Consortium has been working with the Owner and capacitor manufacturer
(ABB/Maxwell) to perform analyses and testing to determine root cause. In the
meantime, capacitors have been removed from the Switchyard, which is presently
operating at partial capacity due to these capacitor issues.

1. Consortium extends 24 month warranty provision and other warranty provisions
of Article 14 of the EPC Agreement to be effective upon the actual Substantial
Completion Dates for Units 2 and 3.
2. Consortium resolves all outstanding warranty claims, to include the
Switchyard capacitor failure claim, to the
Owner’s satisfaction. This will include component extended warranties as
applicable.

98
Cyber-Security
The Owner’s position is that the Consortium is committed in the EPC Agreement to
provide a cyber security program for VCS Units 2 and 3 that complies with
APP-GW- GLR-104, “AP1000 Cyber Security Implementation,” dated May 2007 (also
referred to as TR-104). TR-104 is a requirement included in the AP1000 Design
Control Document (DCD) Revision 16 which is referenced in the EPC Agreement. The
Owner acknowledges that the NRC issued Regulatory Guide (RG) 5.71, “Cyber
Security programs for Nuclear Facilities,” subsequent to the execution of the
EPC Agreement and that there is a level of incremental scope of work which has
not been satisfactorily resolved to the satisfaction of the Owner. The Owner and
Consortium agreed to a Phase I Cyber Security CO (#14), which was executed on
March 14, 2012
The Owner and Consortium have attempted to negotiate a Phase 2 Cyber Security CO
but have been unsuccessful to date. A significant impasse dealt with the
Consortium’s refusal to accept project schedule risk and mandate to Owner a
release of the Guaranteed Substantial Completion date for Unit 2. A Phase 2
Cyber Security technical scope of work has been agreed upon and is included in
the latest draft Cyber Security CO dated February 19, 2015 (VSP_VSG_003270).
This technical scope is entitled “Technical Description for Consortium for
AP1000 Consortium Cyber Security Scope of Supply.” The Owner and Consortium have
discussed scopes of work beyond Phase 2, although no Technical Description for
Phase 3 has been defined. For example, in a previous draft Cyber Security CO
dated February 28, 2013, Phase 3 scope topics were addressed to include
potential warehouse modifications to handle storage and handling of Critical
Digital Assets (CDA’s), the training of site personnel to deal with CDA’s and
site installation and Field Change Notices associated with hardware and software
modification. The Owner and Consortium have also had discussions that Phase 3
work would involve dealing with suppliers of equipment for potential smart
equipment upgrades. The Owner is concerned that the negotiations on cyber
security have been unnecessarily delayed as evidenced by timelines maintained by
the Owner and the Consortium’s decision to hold up work on cyber security and
demobilize personnel earlier this year. It is noted that the Owner had
authorized dollars for the Consortium to perform cyber security work during the
negotiations and had requested that the Consortium continue with the interim
funding provided by the Owner.

Subject to Paragraph 4 of the October 2105 Amendment, Consortium to provide a
cyber security program in accordance with RG 5.71 and accept schedule risk to
meet Guaranteed Substantial Completion Dates agreed to between Owner and
Consortium. All phases of the Cyber Security Program are included in this scope,
which also includes the Phase 2 technical scope referenced in the draft CO dated
February 19, 2015.

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Disputed and Returned Payments
Exhibit B
As of August 21, 2015

WEC Claim
 
 
 
Regulatory Delay Claim
 
$
83,518,046

 
 
 
Payment Entitlement in Dispute
 
 
 
Capped Esc due to Structural Module Delay
 
$
6,275,414

 
Cyber Security
 
$
374,613

 
Target Invoice Returns (storage, tents, firm price)
 
$
13,289,433

 
Target Invoice Withholding (10%) Due to Delay and
 
 
 
Performance Inefficiencies
 
$
7,657,127

 
Interest Expense on Returned Invoices
 
$
2,133,198

 
Total
 
$
29,729,785

 
 
 
No Dispute, Payments Pending CO Execution
 
$
5,565,845

 
HW Escalation Calculation
 
$
5,565,845

 
Total
 
 
 
 
 
Timing of Payment in Dispute
 
 
 
Progress Payments
 
$
99,066,205

 
Milestones Not Complete
 
$
11,124,299

 
Total
 
$
110,190,504

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EXHIBIT C
Items Not Resolved or Released under October 2015 Amendment
Description
Reference
Data Turnover and documentation required
 
Containment Debris Margin Increase
NND-11-0166; VSP_VSG_001218
Auxiliary Boiler design capability
 
Electromagnetic Capability (EMC) with Protection & Safety Monitoring System
(PMS) -
 
American Society of Mechanical Engineers(ASME) Boiler and Pressure Vessel Code
Section VIII pressure vessel over pressure protection
NND-15-0460; VSP_VSG_003682
Site Layout changes, Phase 3, due to security regulatory changes
 
Onsite automation/I&C Support to Owner
during post initial core load
 
Onsite switchyard preoperational test
 
Plant Security System (SES) testing
 
Plant Security System (SES) Unit 2&3 Computer Integration
 

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Confidential Trade Secret Information - Subject to Restricted
Procedures                

AGREEMENT

AMENDMENT TO THE ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT BETWEEN
SOUTH CAROLINA ELECTRIC & GAS COMPANY, FOR ITSELF AND AS AGENT FOR THE SOUTH
CAROLINA PUBLIC SERVICE AUTHORITY AND A CONSORTIUM CONSISTING OF WESTINGHOUSE
ELECTRIC COMPANY LLC AND STONE & WEBSTER, INC., FOR AP1000® NUCLEAR POWER PLANTS

THIS AMENDMENT to the Engineering, Procurement and Construction Agreement dated
May 23, 2008 (“EPC Agreement”) for the AP1000 Power Plants at the Virgil C.
Summer Nuclear Generating Station (“Project”) by and between South Carolina
Electric & Gas Company, for itself and as agent for the South Carolina Public
Service Authority (“Owner”) and a consortium consisting of Westinghouse Electric
Company LLC (“Westinghouse”) and CB&I Stone & Webster, Inc. (“S&W”),
(collectively “Contractor”) is executed on behalf of Westinghouse, shall be
executed on behalf S&W upon the consummation of the Transaction (as defined in
the October 2015 Amendment) and shall become effective upon execution by Owner
and approval of the Public Service Commission of South Carolina, so long as
execution occurs by the 1st day of November 2016, unless such approval is waived
by the Owner or the date is waived by the Contractor (“Option Amendment”). If
execution does not occur by November 1, 2016, this Option Amendment shall be
null and void in all respects. Owner and Contractor may be referred to
individually as a “Party” or collectively as the “Parties.”

In consideration of the mutual promises herein and other good and valuable
consideration, the receipt and sufficiency of which the Parties acknowledge, the
Parties, intending to be legally bound, stipulate and agree as follows:

1.Except as provided in paragraph 2, all remaining Work under the EPC Agreement
as of the Effective Time (defined in the October 2015 Amendment referenced
below) shall be converted to a Fixed Price in exchange for the remaining
Contract Price being adjusted to $6.082 billion in current U.S. Dollars. The
remaining Contract Price adjustment represents the cost to complete the Project
beyond what has been paid through June 30, 2015. Payments made after June 30,
2015 will be credited against the $6.082 billion amount.

2.The following Time and Material Work is not included in the Fixed Price
described in paragraph 1: sales tax, performance bond and insurance premiums,
import duties, Mandatory Spare Parts and Extended Equipment Warranty costs
(other than the costs associated with the warranty extensions provided for in
paragraph 7 of the October 2015 Amendment, because those warranty extensions are
at no cost to Owner). This Work will be billed under the existing terms of the
EPC Agreement.

3.The categories of Target Price and Firm Price are eliminated.

4.The capitalized terms in this Amendment, except for those defined in this
Amendment, shall have the meanings given to them in the EPC Agreement.

5.All provisions of the EPC Agreement not modified, expressly or by necessary
implication, remain in full force and effect.

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Confidential Trade Secret Information - Subject to Restricted
Procedures                

IN WITNESS WHEREOF, the Parties have duly executed this Amendment as of the date
first above written.

SOUTH CAROLINA ELECTRIC & GAS
COMPANY, for itself and as agent for South
Carolina Public Service Authority
By:
 
Name:
 
Title:
 

WESTINGHOUSE ELECTRIC COMPANY LLC
By:
/s/Danny Roderick
Name:
Danny Roderick
Title:
President & Chief Executive Officer

STONE & WEBSTER, INC.
By:
 
Name:
 
Title:
 

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Dispute Review Board Agreement

THIS DISPUTE REVIEW BOARD AGREEMENT (“DRB Agreement”) concerning the
Engineering, Procurement and Construction Agreement dated May 23, 2008 (“EPC
Agreement”) for the AP1000 Power Plants at the Virgil C Summer Nuclear
Generating Station (“Project”) is effective the ___ day of ______________ 2015,
by and between South Carolina Electric & Gas Company, for itself and as agent
for the South Carolina Public Service Authority (“Owner”) and a consortium
consisting of Westinghouse Electric Company LLC and Stone & Webster, Inc.,
(collectively “Contractor”). Owner and Contractor may be referred to
individually as a “Party” and collectively as the “Parties.”
    
WHEREAS, the Parties wish to establish a Dispute Resolution Board (“DRB”) for
addressing all Claims, as defined in the EPC Agreement, and other disputes that
may arise out of or relate to the Project and provisionally resolving such
claims.
NOW, THEREFORE, in consideration of the recital, the mutual promises herein and
other good and valuable consideration, the receipt and sufficiency of which the
Parties acknowledge, the Parties, intending to be legally bound, stipulate and
agree as follows:
1.Owner and Contractor agree to the establishment of a DRB in accordance with
this DRB Agreement to assist in timely, impartial resolution of Claims and other
disputes. All Claims and other disputes arising out of or relating to the EPC
Agreement shall be governed by this DRB Agreement, until Substantial Completion
of both Units.

2.For Claims and other disputes under $5 million, determinations of the DRB
shall be binding on the Parties.

3.For Claims and other disputes of $5 million or higher, determinations of the
DRB shall be treated as binding on the Parties on an interim basis until
Substantial Completion of both Units. Upon Substantial Completion of both Units,
either Party may proceed de novo with dispute resolution in accordance with
Article 27 of the EPC Agreement. Determinations of the DRB will not be
admissible in any de novo proceedings pursuant to Article 27 of the EPC
Agreement.

4.For Claims and other disputes of $5 million or higher, Owner and Contractor
shall submit their written acceptance or rejection of the DRB’s report
concurrently to the other Party and to the DRB within fourteen (14) days of
receipt of the report. Failure by either Party to accept or reject within the
specified period shall be deemed acceptance of the report by that Party. If both
Parties accept the report, then it shall be final, without qualification. If one
or both Parties reject the report, they shall nonetheless treat the report as
binding until thirty (30) days after Substantial Completion of both Units, at
which point the report will have no force or effect.

5.The process outlined in this DRB Agreement shall be the exclusive dispute
resolution process for all Claims and other disputes under the EPC Agreement and
shall be in lieu of the process set forth in Articles 27.3 and 27.4 of the EPC
Agreement, until Substantial Completion of both Units. Thereafter, for Claims or
other disputes covered by Paragraph 3 of this DRB Agreement, the Parties may
proceed as stated in Paragraph 3.

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6.Within thirty (30) days of the execution of the November 2015 Amendment, each
Party shall submit to the other Party for approval the names of its nominees for
membership on the DRB. The Parties shall mutually agree on the three members of
the DRB. Once constituted, the DRB members shall designate one of them as Chair
of the DRB. The DRB shall serve until Substantial Completion of both Units.

7.Members of the DRB shall be experienced in the interpretation of contract
documents, the resolution of construction disputes, and with complex power plant
projects. At least one of the DRB members must be a licensed attorney. To assist
the Parties in the review and approval process, nominated members shall provide
the following, in addition to the nominee’s full name and contact information,
to both Parties:

A.
Resume showing construction experience qualifying the person as a DRB member.

B.
Resume showing past DRB participation, if any. This resume will each DRB
assignment separately, and state the name and location of the project, dates of
DRB service, name of owner, name of contractor, contract value, nominating party
if applicable, names of the other DRB members, and the number of disputes heard.

C.
All three members of the DRB are to be neutral and must affirm their neutrality,
under oath, once the DRB is fully constituted and before the DRB takes any
action.

D.
Disclosure statement describing past, present, and anticipated relationships or
financial ties, including indirect relationships through the nominee’s full-time
employer, if any, to the Project, and with the Parties and with all other
entities directly and indirectly involved in the EPC Contract. Entities
indirectly involved include Fluor, designers, architects, engineers, or other
professional service firms or consultants, joint-venture partners,
subcontractors of any tier, and suppliers on the Project. The disclosure
statement will also disclose close professional or personal relationships with
key members of the Parties and these entities.

E.
Neutrality and disclosure is a continuing obligation of all DRB members
throughout the life of the EPC Contract.

F.
Each member of the DRB shall execute non-disclosure agreements as required by
the Parties.

G.
No DRB member shall be allowed to act as an arbitrator or appear as a witness in
any subsequent arbitration or litigation related to or arising out of the EPC
Agreement.

8.Once fully constituted, the DRB will visit the project site and meet with
representatives of the Parties at periodic intervals and as requested by the
Parties. Any discussion and field observation shall be attended by personnel of
the Owner and Contractor.

9.Owner and Contractor shall enter into good-faith negotiations to settle a
dispute before referring such dispute to the DRB. These good-faith negotiations
shall be involve full and timely disclosure of each Party’s position to the
other Party, including the exchange, where applicable, of pertinent supporting
records, analyses, expert reports, and similar documentation, and shall proceed
without delay following the inception of the dispute. Such good-faith
negotiations may involve the solicitation and rendering of a DRB advisory
opinion as described herein.

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10.Either Owner or Contractor may refer a dispute to the DRB. The dispute
referral shall be made in writing to the DRB Chair with a copy concurrently
provided to the other DRB members and the other Party.

11.The dispute referral shall concisely define the nature and specifics of the
dispute that are to be considered by the DRB and the scope of the determination
requested. The DRB Chair shall confer with the Parties to establish a due date
for delivering pre-hearing submittals, and a date, time, and location for
convening the DRB hearing. Hearings shall be convened, at a location mutually
agreed by the Parties. Absent such agreement by the Parties, the DRB shall
determine the location of the hearings.

12.The procedures governing the hearings shall be established by agreement of
the Parties. Absent such agreement, the DRB shall establish such hearing
procedures.

13.The DRB’s determination of a dispute will be formalized in a written report
with format as determined by the DRB and signed by all DRB members. The report
shall consist of a concise description of the dispute, short statements of each
Party’s position, findings as to the facts of the dispute, discussion and
rationale for the determination, and the determination. The report shall be
submitted concurrently to the Parties, no later than thirty (30) days after
completion of the hearing as agreed by all Parties.

14.Owner and Contractor shall each bear their respective costs and attorney’s
fees. Owner and Contractor shall equally bear the cost of the DRB’s services.

IN WITNESS WHEREOF, the Parties have duly executed this DRB Agreement as of the
date first above written.
SOUTH CAROLINA ELECTRIC & GAS
COMPANY, for itself and as agent for South
Carolina Public Service Authority
By:
 
Name:
 
Title:
 

WESTINGHOUSE ELECTRIC COMPANY LLC
By:
 
Name:
 
Title:
 

STONE & WEBSTER, INC.
By:
 
Name:
 
Title:
 

3

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EXHIBIT F
CONSENT OF GUARANTOR
This Consent is made by TOSHIBA CORPORATION (“Guarantor”), a corporation duly
organized and existing under the laws of Japan and the indirect parent of
Westinghouse Electric Company LLC (“Westinghouse”).
WHEREAS, Westinghouse and Stone & Webster, Inc. (“Stone & Webster”, and
collectively with Westinghouse, the “Contractor”) and South Carolina Electric &
Gas Company, for itself and as agent for the South Carolina Public Service
Authority (collectively, the “Counterparty”) are parties to the Engineering,
Procurement and Construction Agreement between the Contractor and the
Counterparty, dated as of May 23, 2008 (the “Agreement”); and
WHEREAS, in connection with the Agreement, Guarantor executed and delivered to
Counterparty a guaranty of the payment obligations of Westinghouse under the
terms of the Agreement (the “Guaranty”); and
WHEREAS, the Agreement is being amended by an Amendment dated October 27, 2015
(the “October 2015 Amendment”); and
WHEREAS, Guarantor, as indirect parent of Westinghouse, shall receive benefit
from the transaction contemplated by the Agreement as previously amended and as
amended by the October 2015 Amendment and has agreed to give this Consent to
provide assurance for Westinghouse’s payment obligations in connection with the
Agreement as so amended; and
WHEREAS, Guarantor acknowledges the execution and delivery of this Consent is
required by the terms of the October 2015 Amendment.
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby agrees as follows:
1.Guarantor acknowledges the terms of the October 2015 Amendment.
2.The definition of Guaranteed Obligations in the Guaranty includes all payment
obligations of Westinghouse under the terms of the Agreement, as previously
amended and as amended by the October 2015 Amendment.
3.Guarantor hereby reaffirms the Guaranty and agrees that, except as provided
herein, the Guaranty shall remain unchanged and in full force and effect. Each
and every term, covenant and condition of the Guaranty is hereby incorporated
herein such that the Guaranty and this Consent shall be read and construed as
one instrument.
4.The validity, construction, and performance of this Consent of Guarantor shall
be governed by and interpreted in accordance with the laws of the State of New
York, without

--------------------------------------------------------------------------------

giving effect to the principles thereof relating to conflicts of laws except
Section 5-1401 of the New York General Obligations Law.
IN WITNESS WHEREOF, Guarantor has caused this Consent to be executed in its
corporate name by its duly authorized representative.
TOSHIBA CORPORATION

By: /s/Shigenori Shiga                      
Name: Shigenori Shiga    
Title: Representative Executive Officer    
Date: October 27, 2015    

Acknowledged and Agreed by Counterparty as of this 27 day of October, 2015, by:

/s/Kevin B. Marsh                 
Name: Kevin B. Marsh    
Title: CEO, SCANA Corp    

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MUTUAL RELEASE
This Mutual Release (“Mutual Release”) is executed this 27th day of October,
2015, by South Carolina Electric & Gas Company, a South Carolina corporation
having a place of business in Cayce, South Carolina, South Carolina Public
Service Authority, a body corporate and politic created by the laws of the State
of South Carolina (collectively, “Owners”) and Chicago Bridge & Iron Company
N.V. (“CB&I”), a corporation organized under the laws of the Netherlands.
RECITALS
WHEREAS, Owners and a consortium consisting of Westinghouse Electric Company LLC
(“Westinghouse”) and CB&I Stone & Webster, Inc. (“S&W”) (collectively, the
“Contractor”) entered into an Engineering, Procurement and Construction
Agreement with an effective date of May 23, 2008 (as amended or supplemented,
the “EPC Agreement”) pursuant to which the Contractor agreed to assist Owners in
the licensing of and to design, engineer, procure, construct and test two AP1000
Nuclear Power Plants and related facilities, structures and improvements known
as Units 2 and 3 located at the V.C. Summer station in Jenkinsville, South
Carolina, and owned by Owners (the “Project”);
WHEREAS, pursuant to the EPC Agreement, S&W furnished to Owners a Corporate
Guarantee dated and effective as of May 23, 2008 and issued and executed by
S&W’s then-ultimate holding corporation, The Shaw Group, Inc. (“Shaw Group”) (as
amended or supplemented, the “S&W Parent Guarantee”);
WHEREAS, thereafter, in connection with the acquisition by CB&I of Shaw Group,
CB&I executed and furnished to Owners a Corporate Guarantee dated April 29, 2013
(the “CB&I Guarantee”), which replaced the S&W Parent Guarantee;
WHEREAS, Contractor has submitted various notices of Change and Change Dispute
Notices pursuant to the EPC Agreement that remain unresolved and various
commercial issues, Change Disputes and Claims (as defined in the EPC Agreement)
are pending under the EPC Agreement (collectively, “EPC Claims”);
WHEREAS, simultaneously with the execution and delivery of this Mutual Release,
Owners and Westinghouse are entering into a binding Settlement and Release
Agreement (the “Settlement Agreement”), with respect to, among other things, the
EPC Claims;
WHEREAS, Westinghouse, S&W, an affiliate of Westinghouse (“Purchaser”), and CB&I
are entering into a Purchase Agreement pursuant to which, among other things,
Purchaser will purchase all of the outstanding capital stock of S&W; and
WHEREAS, effective upon the Effective Time (as defined in Paragraph 3), Owners
and CB&I agree to release one another from any and all past, current and future
duties, obligations, claims and liabilities arising out of or related to the EPC
Claims, the EPC Agreement, the Project, the S&W Parent Guarantee and the CB&I
Guarantee.

1

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NOW, THEREFORE, in consideration of the recitals and the mutual promises,
covenants and agreements contained in the Settlement Agreement and herein, and
for other good and valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged, Owners and CB&I mutually, release one another
as follows.
RELEASE
1.    Effective upon the Effective Time, Owners, for themselves and their
respective officers, agents, directors, partners, managing members,
stockholders, owners, employees, attorneys, advisors, representatives, insurers,
sureties, predecessors, successors, assigns, parents, subsidiaries and
affiliated entities, heirs, executors and administrators (collectively, the
“Owner Releasing Parties”) and each of them, hereby unconditionally and
irrevocably fully release, forever discharge and covenant not to sue, except for
the Excepted Party as defined in Paragraph 2 hereof, CB&I and its past, present,
and future officers, agents, directors, partners, managing members,
stockholders, owners, employees, attorneys, advisors, representatives, insurers,
sureties, predecessors, successors, assigns, parents, subsidiaries, and
affiliated entities, heirs, executors and administrators (collectively, the
“CB&I Released Parties”), and each of them, from any and all manner of actions,
controversies, suits, matters, liens, rights, liabilities, losses, debts, dues,
damages, claims, guarantees, warranties, judgments, bonds, executions,
obligations, accounts, fines, regulatory penalties (whether civil or criminal),
costs and expenses (including attorneys’ fees) and demands (collectively,
“Claims/Obligations”) of every nature, kind and description whatsoever in law or
in equity, whether known or unknown, or whether suspected or unsuspected, or
whether matured or un-matured, whether liquidated or unliquidated, under any
theory, including joint and several liability, which Owners had, now have, or
hereafter can, shall or may have against CB&I or any of the other CB&I Released
Parties arising out of any manner or event relating to, or otherwise in
connection with or concerning, the EPC Claims, the EPC Agreement, the Project,
the S&W Parent Guarantee and the CB&I Guarantee.
2.        This Mutual Release is not in favor, and does not inure to the
benefit, of S&W (being referred to herein as the “Excepted Party”) and it being
understood and acknowledged that any release in favor of S&W is solely as set
forth in the Settlement Agreement. Except for the Excepted Party as defined in
Paragraph 1 hereof, effective upon the Effective Time, CB&I, for itself and its
respective officers, agents, directors, partners, managing members,
stockholders, owners, employees, attorneys, advisors, representatives, insurers,
sureties, predecessors, successors, assigns, parents, subsidiaries and
affiliated entities (but only to the extent any such subsidiary or affiliated
entity is a subsidiary or affiliated entity after the Effective Time), heirs,
executors and administrators (collectively, the “CB&I Releasing Parties”) and
each of them, hereby unconditionally and irrevocably fully release, forever
discharge and covenant not to sue, Owners and their past, present, and future
officers, agents, directors, partners, managing members, stockholders, owners,
employees, attorneys, advisors, representatives, insurers, sureties,
predecessors, successors, assigns, parents, subsidiaries, and affiliated
entities, heirs, executors and administrators (collectively, the “Owners
Released Parties”), and each of them, from any and all manner of actions,
controversies, suits, matters, liens, rights, liabilities, losses, debts, dues,
damages, claims, guarantees, warranties, judgments, bonds, executions,
obligations, accounts, fines, regulatory penalties (whether civil or criminal),
costs and expenses (including

2

--------------------------------------------------------------------------------

attorneys’ fees) and demands (collectively, “Claims/Obligations”) of every
nature, kind and description whatsoever in law or in equity, whether known or
unknown, or whether suspected or unsuspected, or whether matured or un-matured,
whether liquidated or unliquidated, under any theory, including joint and
several liability, which CB&I had, now have, or hereafter can, shall or may have
against Owners or any of the other Owners Released Parties arising out of any
manner or event relating to, or otherwise in connection with or concerning, the
EPC Claims, the EPC Agreement, the Project, the S&W Parent Guarantee and the
CB&I Guarantee.
3.    This Mutual Release does not release any rights of S&W, the Excepted
Party, it being understood and acknowledged that any release by S&W is solely as
set forth in the Settlement Agreement.
4.        Westinghouse and Owners have agreed that the Settlement Agreement will
automatically become effective upon the closing of the purchase by Westinghouse
or an affiliate of Westinghouse of all of the outstanding capital stock of S&W
(such time of closing, the “Effective Time”).
5.    This Mutual Release and the application and interpretation thereof shall
be governed exclusively by the laws of the State of New York without regard to
conflicts of laws principles.
6.    This Mutual Release shall be fully binding upon each Owner, CB&I and their
respective legal representatives, successors and assigns.
7.    The releases contemplated by Section 1 and 2 are intended to be as broad
as permitted by law, provided that nothing in Section 1 or 2 shall apply to any
action by any releasee to enforce the rights and obligations imposed by this
Mutual Release. Without limiting the foregoing, for the avoidance of doubt, the
releases contemplated by Section 1 and 2 are intended to, and do, extinguish
suspected, unmatured, unliquidated and unknown Claims/Obligations even if,
confirmation, maturation or knowledge of those Claims/Obligations on the date
hereof would have affected the decision to enter into this Mutual Release. The
release of suspected, unmatured, unliquidated or unknown Claims/Obligations was
separately bargained for and was a key element of this Mutual Release, relied
upon by each party in entering this Mutual Release. The Owner Releasing Parties
and the CB&I Releasing Parties shall be deemed to have, and by execution of this
Mutual Release shall have, expressly waived and relinquished, to the fullest
extent permitted by law, any rights or benefits they may have under state law,
federal law, foreign law or common law that may have the effect of limiting the
release set forth in Section 1, including any rights or benefits conferred by
Section 1542 of the California Civil Code or any provision similar, comparable
or equivalent to Section 1542 or successor provision to Section 1542 of the
California Civil Code, which provides that: A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

3

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8.        Each of the persons executing this Mutual Release on behalf of its
respective principals warrants that he or she is legally entitled to enter into
this Mutual Release and release the CB&I Released Parties and the Owner Released
Parties from every claim and liability, whether potential or actual, herein
referred to, and that he or she has the authority to bind his or her respective
principals and has full authority to enter into this Mutual Release.
9.    Owners and CB&I acknowledge and represent that they have each relied
solely upon facts obtained from their own independent investigations in
executing this Mutual Release and that they each have not relied upon any
statements or representations of any nature from the parties to the Settlement
Agreement or any other individuals or entities, or such other parties’,
individuals’ or entities’ attorneys or representatives. Each Owner and CB&I
represent that they have had sufficient opportunity to consult their own legal
counsel with regard to the negotiation and preparation, as well as the scope and
effect, of this Mutual Release.
10.    Owners and CB&I agree to execute any further documents necessary and take
such other actions as to effectuate this Mutual Release.
11.        This Mutual Release may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, Owners and CB&I execute this Release by their duly
authorized representatives.
South Carolina Electric & Gas Company        
for itself and as agent for the South Carolina Public Service Authority

By /s/Kevin B. Marsh         

Title Chairman & CEO                

Date October 27, 2015                      

Chicago Bridge & Iron Company N.V.
        
By /s/Richard E. Chandler, Jr.

Title EVP, Chief Legal Officer & Secretary

Date October 27, 2015    

4

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MUTUAL RELEASE

This Mutual Release is entered into this 27th day of October, 2015, and becomes
effective as described herein, by and among Westinghouse Electric Company LLC, a
Delaware limited liability company having a place of business in Cranberry,
Pennsylvania (“Westinghouse”), CB&I Stone & Webster, Inc., a Louisiana
corporation with a place of business in Charlotte, North Carolina (“S&W”), and
South Carolina Electric & Gas Company (“SCE&G”), for itself and as agent for the
South Carolina Public Service Authority, a body corporate and politic created by
the laws of South Carolina (“Santee Cooper”) (collectively “Owners”).
Westinghouse, S&W and Owners may be referred to individually as “Party” or
collectively as “Parties.”

RECITALS

WHEREAS, Owners and a consortium consisting of Westinghouse and S&W
(collectively “Contractor”) entered into an Engineering, Procurement and
Construction Agreement on May 23, 2008 (“EPC Agreement”) pursuant to which
Contractor agreed to design and construct two new nuclear electrical generating
units known as V.C. Summer Units 2 and 3 (the “Units”) located at the V.C.
Summer Nuclear Generating Station in Jenkinsville, South Carolina (the
“Project”);

WHEREAS, Contractor has submitted various notices of Change and Change Dispute
Notices pursuant to the EPC Agreement that remain unresolved and various
commercial issues, Change Disputes and Claims (as defined in the EPC Agreement)
are pending under the EPC Agreement (collectively, “EPC Claims”);
WHEREAS, Owners and Westinghouse are entering into a binding Amendment Agreement
(“October 2015 Amendment”) with respect to, among other things, the EPC Claims;
WHEREAS, a Westinghouse affiliate, Chicago Bridge & Iron Company N.V. (“CB&I”),
and S&W are entering into a Stock Purchase Agreement pursuant to which, among
other things, Westinghouse or an affiliate of Westinghouse will purchase all of
the outstanding capital stock of S&W (the “SPA”);
WHEREAS, upon the execution the SPA, Westinghouse shall execute this Mutual
Release on its own behalf, and upon the consummation of the SPA (the “Effective
Time”) shall cause S&W to execute this Mutual Release on behalf of S&W; and

WHEREAS, upon execution of this Mutual Release by Westinghouse and S&W, this
Mutual Release shall become effective as of the Effective Time, and in the event
the SPA is not consummated, this Mutual Release shall not become effective and
shall be null and void in all respects.

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NOW, THEREFORE, in consideration of the recitals and the mutual promises,
covenants and agreements contained in the October 2015 Amendment and herein, and
for other good and valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged, Owners, Westinghouse and S&W hereby provide
mutual releases as follows.
RELEASE
1.     Except as otherwise provided in the October 2015 Amendment (including
Exhibit C to the October 2015 Amendment), upon the Effective Time, Owners, for
themselves and their respective officers, agents, directors, partners, managing
members, stockholders, owners, employees, attorneys, advisors, representatives,
insurers, sureties, predecessors, successors, assigns, parents, subsidiaries and
affiliated corporations, heirs, executors and administrators and each of them,
hereby unconditionally and irrevocably fully release, forever discharge and
covenant not to sue Westinghouse, S&W and their past, present, and future
officers, agents, directors, partners, managing members, stockholders, owners,
employees, attorneys, advisors, representatives, insurers, sureties,
predecessors, successors, assigns, parents, subsidiaries, and affiliated
corporations, and each of them, from any and all manner of actions,
controversies, suits, liens, losses, debts, dues, damages, claims, attorney
fees, guarantees, warranties, judgments, bonds, executions and demands of every
nature, kind and description whatsoever in law or in equity, whether known or
unknown, or whether suspected or unsuspected, or whether matured or unmatured,
whether liquidated or unliquidated, under any theory, including joint and
several liability, which Owners had, now have, or hereafter can, shall or may
have against Westinghouse and/or S&W for any events or circumstances occurring
as of the Effective Time and arising out of any manner or event relating to, or
otherwise in connection with or concerning, the EPC Claims, the EPC Agreement
and the Project.

2.Except as otherwise provided in the October 2015 Amendment (including Exhibit
C to the October 2015 Amendment), upon the Effective Time, Westinghouse and S&W,
for themselves and their respective officers, agents, directors, partners,
managing members, stockholders, owners, employees, attorneys, advisors,
representatives, insurers, sureties, predecessors, successors, assigns, parents,
subsidiaries and affiliated corporations, heirs, executors and administrators
and each of them, hereby unconditionally and irrevocably fully release, forever
discharge and covenant not to sue Owners and their past, present, and future
officers, agents, directors, partners, managing members, stockholders, owners,
employees, attorneys, advisors, representatives, insurers, sureties,
predecessors, successors, assigns, parents, subsidiaries, and affiliated
corporations, and each of them, from any and all manner of actions,
controversies, suits, liens, losses, debts, dues, damages, claims, attorney
fees, guarantees, warranties, judgments, bonds, executions and demands of every
nature, kind and description whatsoever in law or in equity, whether known or
unknown, or whether suspected or unsuspected, or whether matured or unmatured,
whether liquidated or unliquidated, under any theory, including joint and
several liability, which Westinghouse and/or S&W had, now have, or hereafter
can, shall or may have against Owners for any events or circumstances occurring
as of the Effective Time and arising out of any manner or event relating to, or
otherwise in connection with or concerning, the EPC Claims, the EPC Agreement
and the Project.

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3.    This Mutual Release and the application and interpretation thereof shall
be governed exclusively by the laws of the State of New York without regard to
conflicts of laws principles.
4.    This Mutual Release shall be fully binding upon Owners, Westinghouse and
S&W and their respective legal representatives, successors and assigns.
5.    Each of the persons executing this Mutual Release on behalf of their
respective principals warrants that he or she is legally entitled to enter into
this Mutual Release and release every claim and liability, whether potential or
actual, herein referred to, and that he or she has the authority to bind his or
her respective principals and has full authority to enter into this Mutual
Release.
6.    Owners, Westinghouse and S&W acknowledge and represent that each has had
sufficient opportunity to consult its own legal counsel with regard to the
negotiation and preparation, as well as the scope and effect, of this Mutual
Release.
7.    Owners, Westinghouse and S&W agree to execute any further documents
necessary and take such other actions as to effectuate this Mutual Release.
8.    This Mutual Release may be executed in counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the Parties execute this Mutual Release by their duly
authorized representatives.

        
Westinghouse Electric Company LLC
 
CB&I Stone & Webster, Inc.
By
/s/Danny Roderick
 
By
 
Title
President & Chief Executive Officer
 
Title
 
Date
October 27, 2015
 
Date
 

South Carolina Electric & Gas Company        
for itself and as agent for the South
Carolina Public Service Authority

By
/s/Kevin B. Marsh
Title
Chairman & CEO
Date
October 27, 2015

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