VIDEO: SCE&G, Santee Cooper abandon nuclear power project

SCE&G, Santee Cooper abandon nuclear power project

BY SAMMY FRETWELL

Santee Cooper, SCE&G abandon unfinished nuclear project after 9 years of work sfretwell@thestate.com  source thestate

JULY 31, 2017 

COLUMBIA, SC After working nine years to expand a nuclear power plant in South Carolina, Santee Cooper and SCE&G said Monday they are pulling out of the $14 billion reactor project in Fairfield County in the wake of rising costs, falling demand for energy, construction delays and the bankruptcy of lead contractor Westinghouse.

SCE&G said in a news release that a comprehensive review of the Fairfield County nuclear project — a review that began after Westinghouse filed for bankruptcy earlier this year — caused the company to conclude that finishing the two nuclear reactors “would be prohibitively expensive.”

The end of the project is likely to cost thousands of workers their jobs and leave customers wondering if they will be reimbursed for the money they already have spent on the effort. SCE&G customers have paid $1.4 billion through higher monthly utility bills as a result of nine different rate increases.

Both SCE&G and Santee Cooper, which have faced withering criticism over rate increases for the project, said they would work to hold down future rate hikes. But they stopped short of pledging to cut power bills for customers as politicians from Fairfield County blasted them for abandoning the project.

Overall, SCE&G and Santee Cooper have spent about $9 billion on a project that analysts said could have ultimately cost more than $23 billion, more than twice the original price tag. Under a state law passed 10 years ago, SCE&G was allowed to charge customers for the work before the reactors were finished. About 18 percent of an SCE&G customer’s bill goes for the nuclear project.

“Customers have had a tough time with this the last several years,’’ Jimmy Addison, chief financial officer of SCANA, SCE&G’s parent corporation, said during a call with investors. “Our intention is to stay away from any kind of increases on the back of this and on customers’ bills.’’

Lonnie Carter, chief executive of Santee Cooper, said nearly $1 billion pledged to Santee Cooper by the Toshiba Corp., Westinghouse’s parent, could be used to offset future rate increases that would have been assessed to pay for the project. The question is whether Toshiba, itself in financial trouble, can make good on the pledge, Carter said. Toshiba pledged $1.1 billion last week to SCE&G that the investor owned utility also said it would use to keep customer rates down.

“It wouldn’t be a direct rebate; they would actually just see it in their power bills through lower costs,’’ Carter said.

Kevin Marsh, chief executive of SCANA, said in a news release that several factors beyond the company’s control have changed since the construction project was launched, including the Westinghouse bankruptcy. SCE&G had considered building just one of the reactors, but rejected that plan after Santee Cooper withdrew from the effort to build the reactors at the V.C. Summer nuclear station northwest of Columbia.

When Santee Cooper let SCE&G know it would pull out, Marsh said, the project could not go forward. His company “reached out to a couple of utilities’’ to take Santee Cooper’s place, but had no luck, he said.

“We arrived at this very difficult but necessary decision following months of evaluating the project from all perspectives,” Marsh said.

Santee Cooper officials said the project had been delayed by the inability to get major construction pieces on time, as well as problems dealing with Westinghouse. The state-owned utility blamed much of the project’s troubles on Westinghouse. Those troubles contributed to the project costing Santee Cooper 75 percent more than originally forecast and delaying its completion by four years, the state utility said.

Santee Cooper also said falling demand for energy made the need for the two reactors less urgent.

“The winds of time .... have certainly changed the way that the world looks today for completing these units,’’Carter said. “We are disappointed that our contractor has not fulfilled their obligations to us.’’

Carter said the federal government should consider helping to build nuclear power plants if federal officials believe atomic energy is worthwhile to pursue. As it stands, Santee Cooper may have to eventually use a coal-fired power plant that the company had mothballed to reduce the amount of carbon released and comply with Obama administration initiatives, Carter said.

http://www.thestate.com/news/local/article164544862.html

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