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SCE&G seeks to brief regulators on nuclear project

Energy
Chuck Crumbo
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South Carolina Electric & Gas plans to update state regulators on the status of two reactor units under construction at V.C. Summer Nuclear Station in Fairfield County.

In a filing with the S.C. Public Service Commission, the company asked regulators to authorize an ex parte communication briefing from 10 a.m. to 11:30 p.m. on Friday.

During the 90-minute session, SCE&G executives would brief commission members about the project, which has been hobbled by cost overruns, construction delays and most recently the bankruptcy filing of the contractor – Westinghouse Electric.

Westinghouse, designer of two AP1000 reactor units that are being built, said it was getting out of the construction business when it filed March 29 for Chapter 11 bankruptcy protection. Westinghouse cited financial losses suffered building reactor units at V.C. Summer as well as another new nuclear project that’s in progress near Waynesboro, Ga.

Westinghouse indicated in court filings that it intends to focus on more profitable operations like nuclear plant maintenance and the manufacturing of fuel rods. (Westinghouse operates a nuclear fuel fabrication plant located on Bluff Road.)

On April 12, SCE&G officials told commissioners that it was in the process of reviewing its options considering Westinghouse’s bankruptcy filing. The process, said Kevin Marsh, CEO of Cayce-based SCANA Corp., parent of SCE&G, could take 60 to 90 days.

“It has now been over 90 days since that proceeding,” attorney Belton Zeigler, wrote in the company’s request to brief the commission. Although the evaluation process is still underway, SCE&G wants to provide an “interim update on the status of the evaluation process” and to answer commissioners’ questions, Zeigler wrote.

As far as proceeding with the project, SCE&G and its partner, state-operated Santee Cooper, are mulling a range of options including:

  • 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.
  • Abandon the project altogether and seek recovery under the state law.

Executives of both SCE&G and Santee Cooper have said abandonment is the least-preferred option because both will need to add generation capacity to serve their growing customer base.

At least two companies appear interested in taking over Westinghouse’s role as contractor, according to Bloomberg.

San Francisco-based Bechtel Corp., and Fluor Corp., of Irving, Texas, reportedly were preparing bids to serve as contractor on both the V.C. Summer and Plant Vogtle projects. Plant Vogtle is Georgia Power’s nuclear facility.

Both Bechtel and Fluor are major engineering and construction firms and Fluor already is working as construction manager on the Summer and Vogtle projects.

Bechtel’s and Fluor’s bids, according to reports, are expected to be ready about the time when Westinghouse’s extension agreement to stay on the job at V.C. Summer expires Aug. 10.

Whoever it is will come from a “fairly small club,” said Steve Byrne, executive vice president of Cayce-based SCANA, parent of SCE&G.

“Certainly, Fluor has that capability. Bechtel would have that capability,” Byrne said during the April briefing before the Public Service Commission. “And there are a probably a handful of others. Perhaps, AREVA, which is a French company. Domestically, probably Fluor and Bechtel would be the two biggest. There are probably one or two others, but it’s not a big community.”

About 5,000 workers remain on the project and SCE&G and Santee Cooper continue to spend $120 million to $160 million a month for work performed during the interim assessment period.

The V.C. Summer project currently is estimated to cost $13.9 billion, more than $2 billion over the original budget approved by regulators in 2009, and is about four years behind the original schedule. However, one analyst projects that the final tab could reach $20 billion.

So far, about $9 billion has been spent on the project, which state regulators green-lighted in 2009.

Meanwhile, further public scrutiny of the project is on tap as the commission has granted the request by Friends of the Earth and the state chapter of the Sierra Club for a hearing to examine whether the Summer project should proceed.

The environmental groups filed a complaint in June with the commission asking for the project to be abandoned and for regulators to order SCE&G to rebate customers for rate hikes approved since the project was approved in February 2009 as well as consider alternative energy sources.

The groups’ argument was bolstered by the Office of Regulatory Staff (ORS), which said in a letter to the commission that the hearing “may be helpful.”

A hearing is scheduled for 10:30 a.m. on Oct. 2.

Reach Chuck Crumbo at 803-726-7542.

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