US utility Santee Cooper has finalised terms of a settlement with Westinghouse Electric Co over ownership of equipment associated with the VC Summer project, giving Santee Cooper full ownership of and the ability to begin marketing all non-nuclear equipment immediately.
Santee Cooper co-owned the VC Summer project, along with South Carolina Electric & Gas (SCE&G). They launched the project to build two Westinghouse AP1000 reactors at the site in 2009 after the state legislature passed the Base Load Review Act, which removed much of the financial risk to investor-owned SCE&G.
Construction of units 2 and 3 at the Summer plant began in March and November 2013. However, construction was abandoned in July 2017, four months after Westinghouse declared bankruptcy, after years of rising costs and delays. Together, SCE&G 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.
Santee Cooper and Westinghouse will now split the net sales proceeds of the nuclear-related equipment according to these terms:
- Major non-installed nuclear equipment will be split 50-50;
- Major installed nuclear equipment, 90% Santee Cooper and 10% Westinghouse;
- Other equipment that could be used in nuclear projects, 67% Santee Cooper and 33% Westinghouse;
Santee Cooper has 100% ownership of the remaining project equipment and Westinghouse has responsibility for marketing the nuclear equipment. The marketing and sales effort will last for up to five years. Under terms of the 182-page settlement agreement, Santee Cooper will provide storage and preservation of equipment at the site and preventative maintenance services throughout 2020.
In May 2019, Santee Cooper had asked a New York bankruptcy court to dismiss Westinghouse’s claim of equipment ownership filed in August 2018 as part of the company’s bankruptcy reorganisation.
In March, preliminary approval was given to a $520 million settlement that would provide refunds to Santee Cooper customers whose rates were increased to pay for the project. SCE&G, now owned by Dominion Energy, reached a $2 billion settlement with ratepayers in November 2018.
Santee Cooper can now begin selling the equipment it has from the VC Summer project. Money from the sale will go towards Santee Cooper’s four-year rate freeze and paying off long-term debt, the state-owned utility said.
“Finalising this agreement is a tremendous milestone, because it means Santee Cooper can move quickly to sell thousands of pieces of equipment ourselves, as well as support Westinghouse’s efforts to sell the nuclear equipment,” said Mark Bonsall, Santee Cooper president and CEO. “We are already planning next steps, and Santee Cooper’s proceeds from equipment sales will be used to shore up our rate freeze and contribute to our long-term plan to retire debt.”