The Santee Cooper Board of Directors has approved a memorandum of understanding (MOU) that establishes a formal feasibility period regarding the potential sale of two partially built AP1000 units at the VC Summer project to Brookfield Asset management.
Santee Cooper, which co-owned the VC Summer project with South Carolina Electric & Gas (SCE&G), launched the project to build two Westinghouse AP1000 reactors at the site in 2009. Construction of the units began in March and November 2013. However, construction was abandoned in July 2017, four months after Westinghouse (then owned by Toshiba) declared bankruptcy, after years of rising costs and delays. Together, SCE&G (now owned by Dominion) and Santee Cooper had spent some $9bn on the project. SCE&G customers had already paid about $1.4bn through higher monthly utility bills for the project, which was about 64% complete.
In 2018 Toshiba announced the completion of the sale of Westinghouse’s holding company to Brookfield Business Partners (a subsidiary of Canadian investment management company Brookfield Asset Management) and some partners. In 2022, Brookfield Renewable Partners (another subsidiary of Brookfield Asset Management) and Cameco acquired Westinghouse Electric from Brookfield Business Partners. The transaction was completed in November 2023 with Brookfield Renewable and its institutional partners owning a 51% interest in Westinghouse and Cameco 49%.
The deal terms for the potential sale of the units include $2.7bn in cash to Santee Cooper should the parties reach a Final Investment Decision (FID) and commit to constructing the units, plus a targeted 25% ownership share for Santee Cooper, with proportional capacity, once the units begin commercial operation. The ownership benefits could be adjusted depending on the final cost of completing the units.
“Santee Cooper has negotiated a strong deal for our customers, including a cash payment that will significantly reduce the debt our customers have been paying, and future electric capacity they will receive from these units at no additional capital cost,” said Santee Cooper President and CEO Jimmy Staton. “Customer relief was one of two top goals when we began this process in January, with the second being optimized value to South Carolina. In addition to enabling completion of units that will generate over 2,000 MWe in reliable, carbon-free electricity here, this deal also puts South Carolina at the front of the nation’s nuclear resurgence.”
Santee Cooper and Brookfield have been negotiating the MOU terms in accordance with a letter of intent approved by the Santee Cooper Board in October, providing a six-week initial project feasibility period. The MOU establishes a path to FID, estimated to take 18 to 24 months.
According to the MOU, a Feasibility Committee, comprised of two members each from Santee Cooper and Brookfield with Santee Cooper appointing the chair, will oversee the diligence process. Brookfield will meet certain milestones throughout the feasibility period and will provide monthly progress reports to Santee Cooper during this period.
Brookfield must determine initial feasibility and establish a target date for its FID by 26 June 2026 and will develop a draft economic development plan by that date. The plan should consider a commitment to using South Carolina companies and labour force, partnerships with K-12 and higher educational institutions and engagement with communities and stakeholders.
Santee Cooper will work with Brookfield on actions needed to evaluate feasibility, as well as actions related to detailed construction planning and analysis, needed to reach FID.
Santee Cooper in 2024 recognised a potential opportunity to identify a third party who would complete the unfinished nuclear units. The utility launched a competitive bidding process in January, receiving initial expressions of interest from over 70 potential bidders and 15 formal proposals.
According to the leaders of Santee Cooper, if it happens, it will be done differently this time. “This is not going to be on the backs of rate payers. It’s not going to be on the backs of our taxpayers in the state,” said Board Chairman Peter McCoy, who has led the utility since 2021. “This is private business stepping up, with help from the federal government.”
