SC utilities to suspend nuclear construction

Wednesday, August 2, 2017

Two South Carolina utilities have announced their decisions to cease work on two new nuclear units under construction at the V.C. Summer Nuclear Station in Jenkinsville, South Carolina.

The project to develop Units 2 and 3 at the V.C. Summer plant was led by contractor Westinghouse Electric Co. LLC, but has experienced years of delay and billions of dollars in cost overruns.  Westinghouse filed for Chapter 11 bankruptcy protection in March 2017, placing the project's future in question.

On July 31, 2017, South Carolina Electric & Gas Company (SCE& G), principal subsidiary of SCANA Corporation (SCANA) and owner of 55% of the plant under construction, announced that it will cease construction at the V.C. Summer site "and will promptly file a petition with the Public Service Commission of South Carolina seeking approval of its abandonment plan." According to a press release, "SCE&G concluded that it would not be in the best interest of its customers and other stakeholder s to continue construction of the project."  Factors cited in SCE&G's press release include "the additional costs to complete the Units, the uncertainty regarding the availability of production tax credits for the project, the amount of anticipated guaranty settlement payments from Toshiba Corporation (Toshiba), and other matters associated with continuing construction , including the decision of the co-owner of the project , the South Carolina Public Service Authority (Santee Cooper), the state owned electric utility, to suspend construction of the project."

Project co-owner Santee Cooper also issued a press release on July 31 announcing its decision to suspend construction of the units.  Santee Cooper cited "a comprehensive analysis of detailed schedule and cost data, from both project contractor Westinghouse Electric Co. and subcontractor Fluor Corp., first revealed after Westinghouse, filed for bankruptcy in March."  According to Santee Cooper, to date it has spent about $4.7 billion in construction and interest costs, but its analysis shows the project would not be finished until 2024 (four years later than Westinghouse's latest estimate) for a total cost to Santee Cooper's customers of $11.4 billion.

The V.C. Sumner project was one of two new nuclear projects under commercial development in the U.S.  The other project, at Plant Vogtle, was also being developed by Westinghouse.  Its fate remains uncertain.

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