SCE&G gets new commitment from Westinghouse to finish V.C. Summer nuclear project

SCE&G and state utility Santee Cooper said late Tuesday they received new commitments from Westinghouse Electric Co. and its parent company, Toshiba Corp., to finish two nuclear plants under construction in Jenkinsville.

The assurances came after questions surfaced Tuesday about construction at the V.C. Summer Nuclear Station following Toshiba’s announcement that Westinghouse would likely take a $6.3 billion loss. Toshiba also said it planned to get out of the business of building nuclear power plants.

Westinghouse also gave SCE&G revised dates for the Unit 2 and Unit 3 reactors to come online. The reactors will begin operating in April 2020 and December 2020, which would meet a federal deadline for incentives imposed at the outset of the projects in 2006.

In addition, Westinghouse agreed to provide the utility a complete project schedule outlining the new in-service dates for the utility to review, SCE&G said.

“If Westinghous means what they say, this is very good news,” said Dukes Scott, executive director of the S.C. Office of Regulatory Staff, which oversees utilities in the state. “We still have these uncertainties and we still have these concerns. We’ve got to wait and see if this goes through.”

The finances of Toshiba and Westinghouse remain a concern for the state, Scott said. And the in-service dates for the two reactors must still be met, he said. The Unit 2 reactor was initially scheduled to go into service last year. Before Tuesday, the latest completion date for Unit 2 had been 2019 with Unit 3 set for 2020.

Westinghouse is the lead construction company at V.C. Summer. The project is years behind schedule and several billion dollars over budget. SCE&G customers have endured nine rate increases during the last seven years to pay for the project. The last rate hike was approved under a fixed-rate contract, with Westinghouse agreeing to pay for any future cost overruns. Under the agreement, SCE&G customers would not face major rate hikes to pay for construction.

State-owned utility Santee Cooper, which owns 45 percent of the V.C. Summer plant, said it, too, was reviewing the new Westinghouse information. “We expect Westinghouse and Toshiba will continue to support our contract and complete Summer units 2 and 3 in accordance with the fixed-price option we executed last year,” said Mollie Gore, Santee Cooper’s spokeswoman.

The Santee Cooper board met behind closed doors in Columbia on Tuesday after Toshiba’s announcement. SCANA, the parent company of SCE&G, said it will discuss Toshiba on its scheduled earnings call on Thursday.

The concerns surfaced when Japan-based Toshiba, which purchased Westinghouse in 2006, failed to make a scheduled earnings announcement on time early Tuesday, missing the deadline by hours without offering an explanation. The company then abruptly announced it likely would take the $6.3 billion loss in its nuclear division, and raised further concerns by stating that a final, completed financial report documenting that figure would not be released until March 14.

Within hours after that, Toshiba’s Chairman Shigenori Shiga resigned in Tokyo, citing the company’s financial losses.

South Carolina has been committed to nuclear energy in a way other regions have not, said Doug Woodward, a USC economics professor and researcher. “We’ve got a lot invested in this (the Summer plant). Ratepayers do. SCANA does. The whole region does now.”

Construction jobs at the plants and jobs within the nuclear industry make up a significant part of South Carolina’s energy porfolio, which is what makes the stakes different, Woodward said. “We made this big commitment and it creates a lot of uncertainty now.”

SCANA’s stock closed Tuesday down 3.17 points, a drop of 4.53 percent. Overall, the stock markets rose on Tuesday, with the Dow Jones Industrial Average increasing 92 points.

Roddie Burris: 803-771-8398