Shaw says NRC concern won't delay nuclear reactor

NEW YORK (Reuters) - After U.S. regulators raised safety concerns about the design of a new Westinghouse nuclear reactor, a company that owns part of Westinghouse said on Friday it did not expect a delay in certification of the reactor design.

Shares of Shaw Group Inc , a construction and engineering company based in Baton Rouge, Louisiana, fell nearly 10 percent Friday on the New York Stock Exchange, a day after the U.S. Nuclear Regulatory Commission told Westinghouse it had some safety concerns about the AP1000 shield building.

Shaw, which owns 20 percent of Westinghouse Electric Co, said Westinghouse does not expect a delay in NRC certification of the AP1000 nuclear design and still expected the first new units to enter service by 2016.

Several major U.S. utilities, including subsidiaries of Tennessee Valley Authority, Duke Energy Corp, Progress Energy Inc, Southern Co, SCANA Corp and FPL Group Inc, plan to use the AP1000 design in new nuclear plants.

The NRC said Westinghouse has not demonstrated that certain structural components of the revised AP1000 shield building can withstand design basis loads. The shield building protects the reactor's primary containment from severe weather and provides a radiation barrier during normal operation.

Shaw said in a release all issues outlined by the NRC could be addressed and the remaining steps to certify the AP1000 design should continue as scheduled.

Shaw owns Westinghouse along with majority owner, Toshiba Corp of Japan and others.

Westinghouse said its goal was to obtain certification of the AP1000 in 2011.

Shaw Group shares closed on Friday at $28.20, down $3.05, or 9.76 percent.

The NRC said Westinghouse will have to modify the design of the shield building and perform testing to demonstrate the building will perform its intended safety function.

"We've been talking to Westinghouse regularly about the shield building since October 2008, and we've consistently laid out our questions to the company," Michael Johnson, director of the NRC's Office of New Reactors, said in the release.

"This is a situation where fundamental engineering standards will have to be met before we can begin determining whether the shield building meets the agency's requirements," Johnson added.

The NRC said the impact on the AP1000 certification schedule would be determined after staff and Westinghouse discuss the company's plans to address the agency's concern.

A Westinghouse spokesman said the company was cooperating with the NRC. Westinghouse said in a release it "fully expected that the NRC would require additional analysis, testing or design modifications to the shield building."

Florida utility regulators meeting to approve pre-construction cost recovery for two utilities that want to build reactors expressed frustration with the NRC.

"The NRC process is supposed to be new and improved, but I'm not so sure it is," said Nathan Skop, a member of the Florida Public Service Commission.

"The NRC has said it would streamline its processes and bring us off-the-shelf plans they would approve," said PSC Chairman Matthew Carter. "It's time for them to expedite the process. We have ratepayers' dollars on the line."

(Additional reporting by Eileen O'Grady; Editing by David Gregorio)