US NPP owners consider options after Westinghouse bankruptcy

3 April 2017

US Scana Corporation, which is building two Westinghouse AP1000 units at the VC Sommer NPP in South Caroline, is considering whether to complete or abandon one or both units as part of a 30-day evaluation of information provided by Westinghouse on its filing for Chapter 11 protection from creditors, Scana CEO Kevin Marsh said on 29March. Units 2 and 3 at the Summer NPP are being built for Scana subsidiary South Carolina Electricity and Gas (SCE&G) and co-owner Santee Cooper. Both Westinghouse and its majority owner, Toshiba, stressed that only Westinghouse's US operations would be affected by the filing.

Marsh said Scana and Santee Cooper had reached an agreement with Westinghouse to allow the continuation of work on the project during an initial 30-day transition and evaluation period, during which Scana will begin work to determine the "most prudent" path forward for the project. The agreement is subject to the approval of the bankruptcy court. Marsh said Westinghouse had provided Scana with an estimate of the additional cost of completing the project, beyond that already provided under existing agreements.

He said Scana would review the estimate, but that it expects resources from Westinghouse and Toshiba - including a so-called parental guarantee from Toshiba - to be adequate to compensate Scana for the additional costs. These, together with a surety bond and an escrow of AP1000 intellectual property and software, would be considered as Scana determines to course it wants to take, he said.

Possible option include: continuing with the construction of both new units; focusing on the construction of one unit, and delaying the construction of the other; continuing with the construction of one and abandoning the other; and abandoning both units. Should an option involving abandonment of one or both units turn out to be the best option, he said, Scana will seek recovery under the provisions of South Carolina's Base Load Review Act.  

Marsh said his own preferred option would be to complete the project. "We built these plants because we needed generation for our service territory. We were looking for a long-term clean energy solution, which these plants provide … If we just cancel these plants we still have a generation issue we need to face," he said. "Our commitment is still to try to finish these plants - that would be my preferred option before going through the evaluation. The least preferred option, realistically, is abandonment," he said.

Similar problems face Southern Company's Georgia Power, which is building two AP1000 units at the Vogtle NPP in Georgia. Marsh said Scana worked with Southern on the interim agreement, and that the companies were in communication with the consent of Westinghouse and Toshiba. While both companies had an interest in completing the projects, he noted that the contracts for the projects are different.

Georgia Power said in a statement on 29 March 2017 that it and co-owners had been preparing for the possibility of a Westinghouse bankruptcy. The Vogtle owners are conducting a review of the cost to complete the nuclear units being built by Westinghouse and to determine the impact of the bankruptcy on the project, the statement said.  



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