South Carolina utilities SCE&G and Santee Cooper expect to decide by this fall, if not sooner, whether to pull the plug on a $14 billion nuclear expansion project that has been plagued by financial troubles, lengthy delays and intense criticism over the amount of money the effort is costing customers.
The power companies said Monday they will spend another six weeks weighing the benefits and costs of finishing the project in Fairfield County before making their decision.
Monday had been the deadline to complete assessments of the twin-reactor project they are jointly building north of Columbia. The project has had problems in recent years, but its future plunged into further doubt when chief designer and contractor Westinghouse filed for bankruptcy in March. Since that time, the utilities have kept the project going while examining whether they should complete it.
In announcing Monday it would extend the deadline to complete the study, SCE&G said it would likely be the third quarter of 2017 before it decides whether to halt the project. Santee Cooper executive Lonnie Carter said he hopes the state-owned utility will act within the 45-day study period.
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“We are in the process of buttoning this up and will be coming forward with it as soon as we can,’’ Carter said after the Santee Cooper board voted to have staff continue studying the matter. “The board is expecting us to make a decision in that 45 days.’’
Financial analysts have suggested the cost of the project could be nearly $23 billion, more than double its original figure. The first of two reactors was supposed to have been completed last year, but now won’t be done until at least 2020, officials say.
“The board will either be saying go forward or stop, within that 45 days,’’ Carter said.
SCE&G, an investor-owned utility that serves the Columbia and Charleston areas, issued a statement after 4 p.m. Monday saying it had extended the deadline.
“The agreement extension allows the co-owners additional time to maintain all of their options by continuing construction on the project, while examining all of the relevant information,” SCANA’s statement said.
The current projected cost of the effort to build two reactors is approaching $3 billion over the initial budget, but construction is only about one-third complete. To pay for the upfront costs, SCE&G ratepayers have been hit with nine power bill increases, while Santee Cooper customers have experienced five increases since 2009. A sixth was proposed Monday during Santee Cooper’s board meeting at Lake Moultrie.
About 18 percent of the average SCE&G customer’s power bill pays for the nuclear plant. SCE&G ratepayers have put about $1.4 billion toward the unfinished project, but that is only for finance costs. Santee Cooper has not provided a similar breakdown, but officials said the five rate increases since 2009 have generated more than $500 million, much of it for the nuclear project.
On Monday, the Santee Cooper board heard a plan to raise electricity rates for its customers. At least half of the revenues from the rate increases go toward the nuclear project, spokeswoman Mollie Gore said. If the increases are approved later this year, the average monthly residential bill would rise from $127.60 to $133.80 next year. Rates would go up again the following year to $139.90.
Overall, SCE&G and Santee Cooper have collectively sunk nearly $9 billion into the project that today employs about 5,000 people. SCE&G, which serves more than 700,000 electric customers, is a 55 percent partner in the effort. Santee Cooper, which supplies power to 2 million people, has a 45 percent share.
Monday’s action by SCE&G and Santee Cooper will keep the project going. The Santee Cooper board voted to authorize up to $50 million to pay for the work in the next 45 days, bringing to $300 million the amount the public power company has pledged to keep the reactor work afloat since the Westinghouse bankruptcy. The utility previously pledged $250 million, not all of which has been spent yet, Carter said.
A federal bankruptcy court would have to sign off on the deadline extension, but Carter said he expects that will be approved.
Leighton Lord, Santee Cooper’s board chairman, suggested at Monday’s meeting that Santee Cooper would like to continue with the nuclear project, but only if the cost is reasonable. Nuclear provides a stable and plentiful source of energy, and it is better for the environment than carbon-emitting coal plants, he said.
“There is no way to keep the lights on at Google down the street and Nucor down the street without baseload generation like nuclear,’’ the Columbia lawyer said. “Nuclear is the best way to generate carbon-free power. That said, we can only do it if our customers can afford it. So what the financial team is going to have to do is to show the board this is affordable.’’
Google has a large data center complex near Charleston, and Nucor operates a steel mill in Berkeley County.
Carter said Santee Cooper has had difficulty completing its assessment because Westinghouse didn’t provide the information needed to make a decision more quickly. Westinghouse has been criticized for failing to provide a detailed construction schedule and cost information that the utilities needed. Carter called the lack of information a significant hindrance.
“Some of it we’ve actually had to go to other parties to get appropriate information because it was lacking,’’ Carter said.
With limited help from Westinghouse, the Fluor corporation is one of the companies involved in the construction project that has helped Santee Cooper with information it needed, Carter said.
The Summer atomic reactor expansion effort has been criticized by environmental groups for a variety of reasons, including the impact it has had on ratepayers.The two nuclear reactors near Jenkinsville north of Columbia would complement an existing reactor built decades ago at the site.
Last week, environmentalists called on the state Public Service Commission to order SCE&G to refund customers for rate increases they have incurred to pay for the project. Santee Cooper, as a state-owned utility, is not regulated by the PSC. A hearing is scheduled for Aug. 14. Critics of the project have hired an expert witness to represent the interest of ratepayers, they say .