During Wednesday’s 70-minute conference call with financial analysts, SCANA CEO and chairman Kevin Marsh was asked why the company doesn’t go ahead and abandon the new reactor project at V.C. Summer Nuclear Station.
Hours earlier Westinghouse Electric, the project’s contractor, announced that it had filed for Chapter 11 bankruptcy protection and indicated it wanted to get out of the nuclear construction business.
After all, state law allows the company to walk away from the project and seek approval from state regulators to recover the billions it has already spent. “Why is that not the preferred option right now?” the caller asked.
“I wish it were that simple, but unfortunately it is not,” Marsh answered. “Our commitment is to try and finish these plants. I mean that would be my preferred option.”
Abandoning construction of two 1,117-megawatt reactor units at the V.C. Summer Nuclear Station is one of four options that SCANA, parent of South Carolina Electric & Gas, and Santee Cooper, might choose as the utilities mull their next move following Westinghouse’s bankruptcy filing.
“It’s pretty clear, I believe, from their filings that they’re looking for us to take over these projects, so before we commit to doing that we’ve just got to understand the details behind it,” Marsh said.
SCANA and Santee Cooper said they’ve reached an agreement with Westinghouse, subject to bankruptcy court approval, that allows for a 30-day transition and evaluation period during which the utilities will assess information provided by Westinghouse and determine how they’ll proceed on the project.
Options that will be studied during the transition period would include:
- Continue with construction on both units.
- Focus on construction of one unit and delay work on the other.
- Continue with one unit and abandon the other, seeking recovery of money spent on the project under the state Base Load Review Act.
- Abandoning the project altogether and seek recovery under the state law.
“We’ve got to evaluate all of the options,” Marsh told analysts. “So just to select that (abandonment) option today without making a determination of the options going forward, I don’t really think would be prudent on our part.
“We built these plants because we needed generation for our service territory, we were looking for a long-term clean energy solution these plants provide, and we want to make sure we’ve got the energy that our state needs as we go forward and it continues to develop.
“So, we’ve got a commitment to our customers to make sure we can meet their needs. If we just cancel these plants, we still have a generation issue we need to face.”
The $13.9 billion project is more than $2 billion over the original budget approved by state regulators in 2009, and about three years behind schedule. SCE&G, SCANA’s principal subsidiary, owns 55% of the project and Santee Cooper’s share is 45%.
Westinghouse has provided SCE&G with revised in-service dates of April 2020 and December 2020 for Units 2 and 3, respectively, the Cayce-based utility said in an earlier news release.
Texas-based Fluor Corp., which has an office in Greenville, was brought on last fall to manage the project.
Since the Public Service Commission approved SCE&G’s request in 2009 to build the reactors, the company’s electricity customers have seen nine rate increases to cover financing costs for the new units. According to the state Office of Regulatory Staff, residential customers using 1,000 kilowatt hours per month have seen their bill climb to $147.53 per month. About 18.2% of the bill is the result of the nine rate hikes, according to ORS.
SCE&G sells electricity to approximately 709,000 customers in the central and southern portions of South Carolina. State-operated Santee Cooper and the 20 electric cooperatives serve more than 900,000 customers across South Carolina.