Santee Cooper board to discuss Toshiba settlement on troubled nuclear project

The state-owned Santee Cooper power company will take steps Thursday that could decide the fate of a troubled $14 billion nuclear reactor project the utility is building with partner SCE&G in Fairfield County.

With an analysis of whether to continue the project to be finished soon, Santee Cooper’s board will consider a proposed settlement with the Toshiba Corp. that could cover some of costs of the over-budget and behind-schedule construction effort.

It was not known Wednesday whether any Toshiba payments would go to keep the construction underway or be used to defray what has already been spent building two reactors.

Toshiba and utility officials have been negotiating a settlement since Westinghouse – a Toshiba subsidiary – filed for bankruptcy last spring. Westinghouse was the chief contractor on the V.C. Summer expansion project, as well as another project in Georgia.

Details of the proposed settlement were not disclosed Wednesday, but SCE&G said this past spring it could be as much as $1.7 billion for the two utilities. The Santee Cooper board is expected to vote after a private meeting by conference call, the company said.

The money could defray a chunk of the cost of the project, now estimated at $14 billion. The project is already as much as $3 billion over budget and, some forecasts say, the costs will rise even further.

That is a concern to environmental groups and other public interest organizations, which say customers of both utilities could be hit with higher rates to pay for cost overruns. They favor shutting down the project, which is 33 percent complete, even though the first reactor was supposed to be built by 2016.

Collectively, customers of SCE&G and Santee Cooper already have been hit with 14 rate increases since the project started nearly a decade ago.

Tom Clements, an adviser to Friends of the Earth, said he is not sure Toshiba’s offer will be enough to finish the twin-reactor project. He also questioned whether Toshiba, financially troubled due to Westinghouse’s bankruptcy, could make good on the agreement.

“I don’t think whatever they get from Toshiba is going to make up for the shortfall,’’ Clements said, noting “ratepayers will be left to make up billions of dollars in coming cost overruns.’’

Neither Santee Cooper nor SCE&G would disclose whether Toshiba is offering $1.7 billion to the utilities. Toshiba has agreed to pay about twice as much to Georgia utilities that also were affected by the Westinghouse bankruptcy.

In June, Toshiba reached an agreement with the Southern Co. and its partners to pay $3.68 billion as compensation for the Westinghouse bankruptcy. Westinghouse also was the chief contractor at the Vogtle nuclear expansion project in Georgia. It is unknown why the amounts would be different between the Georgia and S.C. projects.

Thursday’s Santee Cooper board meeting comes just a few days before SCE&G goes before the S.C. Public Service Commission. SCE&G will brief the Public Service Commission on the status of the V.C. Summer project Tuesday.

Santee Cooper and SCE&G have an Aug. 10 deadline to complete studies on whether to finish the reactor project. Both companies have said they want to finish building the reactors but would not do so if the cost is too high.

Mollie Gore, a spokeswoman for Santee Cooper, said Toshiba’s proposal was “certainly a missing ingredient” in her company’s feasibility study. SCE&G spokeswoman Rhonda O’Banion said the company had nothing to announce.

Dukes Scott, director of the S.C. Office of Regulatory Staff, said both utilities could be near conclusion of their studies on the reactor project.

This story was originally published July 26, 2017 at 2:28 PM with the headline "Santee Cooper board to discuss Toshiba settlement on troubled nuclear project."