Fate of US VC Summer NPP still uncertain

17 August 2017

US Scana Corp is withdrawing a petition submitted to regulators seeking to abandon construction of two AP1000 reactors at units 2 and 3 of the VC Summer NPP in South Carolina. Scana subsidiary South Carolina Electric and Gas (SCE&G) said on 15 August that it will voluntarily withdraw its abandonment petition filed two weeks previously with the Public Service Commission (PSC) of South Carolina under the Base Load Review Act. The decision aims to give various stakeholders and South Carolina legislators more time to discuss the future of the construction project, the company said.

“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,” said Kevin Marsh, Scana chairman and CEO.

SCE&G needs PSC approval to formally abandon the plant and get back money already spent on construction through rates charged to customers. The company had said it wants to charge customers at least $2.2bn extra for the project. Customers have already paid $1.4bn. SCE&G’s decision to drop its petition to abandon the project effectively delays any electricity bill increases SCE&G customers might have to pay. It does not mean the company is seeking to restart the project, but it does give state leaders time to discuss the company’s decision last month to walk away from the construction effort, according to the state Office of Regulatory Staff.

Scana announced its decision to abandon the “prohibitively expensive” project on 31 July, forecasting that its share of costs, as a 55% owner of the project (Santee Cooper owns the remainder), would soar to $9.9bn. If the Toshiba guarantee of $1.1bn (for SCE&G’s 55% share) was factored in, net cost of construction still stood at $8.8bn, exceeding South Carolina PSC’s approved fixed price option of $7.7bn, it said. Completing unit 2 and abandoning unit 3, meanwhile, would have cost $7.1bn.

In the weeks following the decision, however, South Carolina Governor Henry McMaster has reportedly increased 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 9 August. “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.

However, SCE&G spokesman Eric Boomhower  emphasised that the company has no plans to restart construction. The Westinghouse bankruptcy  plus higher costs and the time it would take to finish the work, makes dropping the project the company’s best option, the company said. The original $11bn project costs have already risen to an estimated $20bn. “We believe it would be appropriate to allow more time for our state’s government officials to fully review and understand how we arrived at our decision to file for abandonment,” Boomhower said

A company statement said: "Over the past two weeks, SCE&G management has met with various stakeholders and members of the South Carolina General Assembly, including legislative leaders, to discuss the abandonment of the new nuclear project and to hear their concerns." SCE&G said its decision to withdraw the abandonment petition was "in response to those concerns, and to allow for adequate time for governmental officials to conduct their reviews."



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