SCANA Corp. is withdrawing a petition submitted to regulators seeking to abandon the construction of Units 2 and 3 at the V.C. Summer Nuclear Station in South Carolina.
The company’s subsidiary South Carolina Electric and Gas (SCE&G) said on August 15 that it will voluntarily withdraw its abandonment petition filed just two weeks ago with the Public Service Commission (PSC) of South Carolina under the Base Load Review Act. The withdrawal decision is to give various stakeholders and South Carolina legislators more time to discuss the future of the costly, much-delayed nuclear construction project, the company said.
“We have been meeting with governmental officials and various stakeholders since our announcement to abandon the new nuclear project,” said Kevin Marsh, SCANA chairman and CEO, in a statement on August 15.
“The purpose of these ongoing meetings is to discuss their concerns and to explain the path that led us to the abandonment decision,” he explained.
Project Owners Seek New Buyers
SCANA announced its decision to abandon the project on July 31, saying it would be “prohibitively expensive” to continue. SCANA forecast that its share of costs, as a 55% owner of the project (Santee Cooper owns the remainder), would soar to $9.9 billion. If the Toshiba guarantee of $1.1 billion (for SCE&G’s 55% share) was factored in, net cost of construction still stood at $8.8 billion—far surpassing the South Carolina PSC’s approved fixed price option of $7.7 billion, it said. Completing Unit 2 and abandoning Unit 3, meanwhile, would have cost $7.1 billion.
“While ceasing construction was always our least desired option, based on the impact of the bankruptcy of Westinghouse on our fixed price construction contract, the results of our evaluation of the cost and time to complete the project, and Santee Cooper’s decision to suspend construction, abandonment was the prudent decision,” Marsh said on August 15.
In an investor call following the decision to abandon the project on July 31, Marsh noted that SCANA explored a number of possibilities to keep the project alive, including looking for a partner to take up state-run utility Santee Cooper’s 45% share. However, no buyers stepped forward.
“It is possible that someone would step forward and say, ‘We are interested in joining this project,’” Marsh told an analyst on that call.
“I would have to be realistic, though, and tell you I think that would take many months for us to come to a new construction agreement to determine on what percentages everybody could agree to participate, draft those agreements, go back before the [regulators] and have the project reconstituted.”
South Carolina Ramps Up Efforts to Keep Project Alive
In the weeks following the decision, however, South Carolina Gov. Henry McMaster has reportedly ramped up efforts to revive the project. Options considered include new ownership of Santee Cooper’s share. The governor’s office told reporters that discussions are underway with a number of power companies, including Duke Energy, Southern Co., and Dominion Energy.
Santee Cooper is also reportedly looking for a buyer. “We have heard from two interested parties and are beginning our own outreach to others,” Santee Cooper spokeswoman Mollie Gore told The Post and Courier on August 9. “We have a letter asking about interest in Santee Cooper’s share of the project going out this week to about 50 utilities and other entities in the Southeast who could enter into power purchase agreements,” she added.
For Santee Cooper, the decision to cease construction on the reactors was based “in large part on 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,” the company said on July 31.
Santee Cooper has spent approximately $4.7 billion in construction and interest to date for its 45% share of the new nuclear power project. “The analysis shows the project would not be finished until 2024, four years after the most recent completion date provided by Westinghouse, and would end up costing Santee Cooper customers a total of $11.4 billion,” it said in a statement.
Santee Cooper would have needed to spend about $8 billion to complete construction plus about $3.4 billion for interest, it explained. “The schedule delays increased the projected interest costs 143 percent over the original plan,” it said.
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)