Published Sept. 3, 2015
S.C. Electric & Gas Co.’s share of costs for construction of two reactor units at its Jenkinsville nuclear power plant will climb $698 million in 2007 dollars, according to a settlement agreement that the state Public Service Commission unanimously approved Wednesday.
The agreement, reached earlier this summer by the utility and representatives of the Office of Regulatory Staff and S.C. Energy Users, also includes a new construction schedule allowing completion of the two new units to be delayed about three years to June 2019 and June 2020.
“The approved schedule, including these estimated completion dates, is based upon information received from Westinghouse Electric Co. and Chicago Bridge & Iron,” said SCE&G, principal subsidiary of Cayce-based energy provider SCANA Corp.
The estimated overruns would raise SCE&G’s share of the project to $5.2 billion in 2007 dollars, or about $6.8 billion in today’s dollars, including escalation and allowance for funds used during construction, the company said.
State-operated Santee Cooper is SCE&G’s partner in the new nuclear project, which it’s now estimated will cost nearly $11 billion, compared with the original estimate of $9.8 billion projected in 2008. The utilities operate an existing reactor unit at V.C. Summer Nuclear Station, which went into commercial operation in 1984.
The commission on Wednesday also approved a revision in SCE&G’s return on equity, knocking it down to 10.5% from 11%. The revised return will be applied prospectively to calculate revised rates sought by the utility under the Base Load Review Act on and after Jan. 1, until the new units are completed, SCE&G said.
The delays and higher costs are the result of design and fabrication issues associated with the production of submodules used in the construction of the reactor units, SCANA CEO Kevin Marsh said earlier.
The commission’s vote and the settlement agreement were criticized by Tom Clements, director of Savannah River Site Watch, a consumer watchdog organization.
“Our prediction before the PSC in 2008 that the project would face massive cost overruns and schedule delays has come true, revealing that the PSC should have listened to the wisdom of the public and not just to just a powerful utility,” said Clements, referring to when SCE&G first sought state approval to build the reactor units. “The chronic problems with the SCE&G nuclear project underscore that legislation and regulation must be changed from a model based on semiregulated monopolies to that where there are many players in a decentralized market, including small generators of solar power.”