End $14 billion S.C. nuclear plant project, pay customers back for overruns, critics say
Critics of SCE&G’s over-budget and behind-schedule nuclear expansion project are asking state regulators to stop the utility from spending more money to build two atomic reactors – and they want the power company to pay customers back for cost overruns.
With the future of the project already in doubt, Friends of the Earth and the S.C. Sierra Club requested Thursday that the state Public Service Commission hold a hearing on the wisdom of continuing the $14 billion construction job, which is now $2 billion-$3 billion over budget.
The PSC later agreed to hold a hearing Aug. 14. SCE&G said the session isn’t necessary, but the state Office of Regulatory Staff, charged with looking after consumer interests, said it supports the public hearing.
Environmentalists want the regulatory agency to tell SCE&G “to immediately cease and desist expending further capital costs on the project,’’ according to a complaint filed Thursday with the PSC seeking the hearing and a halt to further charges.
Sierra Club lawyer Bob Guild said SCE&G should pay back money to customers “for unjust and unlawful rates.’’
The amount the commission could order the company to refund could easily be millions, if not billions, of dollars, although that won’t be fully known without a PSC hearing, Guild said during a news conference outside the PSC offices Thursday.
“Part of what we’re trying to do is to get the facts about who knew what when,’’ Guild said, explaining that state law allows for “reparations,’’ or rebates, if money is wasted. If waste occurs, the cost “can’t be passed on to ratepayers,’’ he said. The groups are seeking “long-delayed justice’’ for ratepayers, he said.
Since the project started, SCE&G customers have been hit with nine rate increases to finance the work. That amounts to about 18 percent of the average customer’s power bill. All told, ratepayers have put about $1.4 billion toward the unfinished project, but that is only for finance costs. Construction costs are still an issue, said Tom Clements, a senior adviser with the Friends of the Earth environmental group. The project owners have sunk nearly $9 billion into the work already, records show.
The company’s nuclear project, being constructed jointly with the state-owned Santee Cooper power company, is in trouble because contractor Westinghouse filed for bankruptcy this past spring. Westinghouse’s parent company, which was supposed to help guarantee money for the project, also is in financial jeopardy.
SCE&G and Santee Cooper are reassessing whether they want to continue building the nuclear reactors at V.C. Summer in light of the bankruptcy. They are supposed to complete an assessment of the plant’s future by Monday, but have not said when they would announce a decision on the project.
Clements and Guild said they expect SCE&G and Santee Cooper to seek to delay making a final decision on whether to complete the project.
In an email to The State newspaper, SCE&G spokeswoman Rhonda O’Banion said the August hearing requested by the Sierra Club and Friends of the Earth would be “premature.’’ The company plans to seek a “complete and thorough review’’ of the evaluation it is conducting of the project, she said.
O’Banion indicated Thursday that SCE&G is not close to announcing its position on whether to complete the nuclear construction project, which now is about one-third finished.
“The term of our interim assessment agreement with Westinghouse ends on June 26, but that date is not a deadline for the V.C. Summer owners to make a decision as to the most prudent path forward for the project,’’ O’Banion’s email said. “Our goal is to reach a decision that would take into account the needs of customers and other stakeholders.’’
Problems associated with the V.C. Summer expansion effort follow years of complaints by environmentalists over the need for the project, as well as a law approved by state lawmakers. The law, the Baseload Review Act, lets SCE&G charge customers up-front for the costs, instead of having to justify expenses after work has been done. Critics said that made SCE&G less worried about rising costs.
Launched about eight years ago, the project is today approaching $3 billion over budget. The first reactor was supposed to be completed in 2016, but recent estimates show the reactors would not be finished until 2020, at the earliest.
While the latest cost estimates are about $14 billion, Clements, citing projections by financial analysts, said the nuclear plants could ultimately cost $22.9 billion, about twice the estimated original cost.
To keep the project going in the wake of the bankruptcy, SCE&G is spending about $120 million per month, an amount Clements and Guild said has not been approved by the PSC.
Clements said he was encouraged that the PSC had agreed to hold a hearing in August to learn more about what caused cost overruns. The groups have hired an economist to act as an expert witness in future PSC hearings about the V.C. Summer nuclear project, according to a news release.
In addition to seeking the hearing, environmentalists Thursday called for the increased use of solar, wind and other renewable energy sources, instead of nuclear. Guild said the amount of energy to be produced by the twin nuclear plants isn’t needed as demand has flattened out.
SCE&G and Santee Cooper are now trying to persuade Congress to extend a deadline for the plants to be completed, which will allow them to collect a production tax credit. More than $2 billion in tax credits are riding on the bill, which was moving through the U.S. House of Representatives this week.
This story was originally published June 22, 2017 at 1:01 PM with the headline "End $14 billion S.C. nuclear plant project, pay customers back for overruns, critics say."