Westinghouse Electric tried “an ambitious new approach to building nuclear power plants” by building sections of the plants in one location before sending them to the construction site for assembly. They tried the process with two nuke plants–one in Georgia and the other in South Carolina. The process they “innovated” failed and took the company down–into bankruptcy. What does that have to do with the Mariner East 2 (ME2) Pipeline project? Westinghouse Electric is headquartered just outside of Pittsburgh and owns a fair amount of land. Mariner East 2 intends to cross a portion of that land. Sunoco Logistics Partners, builder of ME2, attempted to negotiate a payment for an easement to cross Westinghouse’s land–but Westinghouse wanted more than ME2 offered. So ME2 filed paperwork to use eminent domain and “condemn” the Westinghouse property. In other words, let a judge decide how much is fair. Westinghouse joined the chorus that “ME2 isn’t really a public utility”–sounding no different than the Sierra Club and others who oppose the project. That strategy went nowhere, so Westinghouse eventually came back to the bargaining table and this time, worked out a deal–to sell some of their land to ME2. Now Westinghouse is asking the bankruptcy judge in charge of their case to approve the land sale, ahead of the judge’s decision on other matters to do with the bankruptcy. Here’s an account of the high stakes of “chicken” between Westinghouse and ME2…
We’d say in the end, ME2 won this game of “chicken”:
Westinghouse Electric Co. is asking a bankruptcy judge to allow the speedy sale of a portion of property in Westmoreland County to a pipeline subsidiary of Sunoco Logistics Partners.
The Cranberry-based nuclear firm stands to gain $920,550 from the sale of 72 acres.
Westinghouse, which filed for bankruptcy on March 29, has been engaged in talks with Sunoco for more than a year over a plan to run two natural gas liquids pipelines across a property that houses Westinghouse’s specialty metals plant in Blairsville. The factory makes components for nuclear fuel.
At first, Sunoco wanted to expand an existing right of way on the property, but when that was determined not to be feasible, the two companies discussed a sale. But they couldn’t agree on the terms.
On April 1, 2016, Sunoco filed paperwork to condemn the stretch of land it needed to cross Westinghouse’s property. Sunoco has invoked eminent domain to attempt to gain access to a large number of properties along its more than 300-mile route.
Westinghouse objected to the move by claiming, among other things, that Sunoco’s pipelines are not public utilities. The company said Sunoco is engaged in not just interstate transport but international commerce — some of the natural gas liquids that will flow through the pipelines will end up at Sunoco’s Marcus Hook facility on the East Coast, from where they will be exported. That would put them outside the jurisdiction of the Pennsylvania Public Utility Commission, which grants utilities the power to take property by eminent domain, Westinghouse argued.
But by January, Sunoco and Westinghouse appeared to have reached a deal. On Tuesday, a month into a bankruptcy proceeding, Westinghouse described it as “exercise of sound business judgment.”
The transaction would allow Westinghouse to avoid fighting Sunoco in court over the eminent domain filing and it will “lead to a value-maximizing sale,” the nuclear company said in a filing in bankruptcy court.
Sunoco is proposing to pay $12,750 per acre, a price higher than what Westinghouse had previously rejected, the nuclear company said. And Westinghouse doesn’t need the property, it said. The 72-acre chunk would be separated from the remaining 174 acres to the north where the Blairsville plant sits.
The sale is set to go before Westinghouse’s bankruptcy judge on May 23.*
*Pittsburgh (PA) Post-Gazette (May 3, 2017) – Westinghouse wants to sell land to Sunoco for pipeline