SCE&G counts on Westinghouse, but vows to complete nuke plant

The path to completing two reactors under construction at the V.C. Summer nuclear plant may not be clearer for at least another couple of months, the SCANA Corp. said Thursday, but there are no plans to scrap the now $14.2-billion project.

“We still anticipate completing our two new nuclear units, which will enable us to provide our customers with safe, reliable energy for decades to come,” said Kevin B. Marsh, SCANA’s chairman and chief executive officer. “We continue to monitor Toshiba’s financial situation and their proposed recovery plan.”

Marsh’s comments, delivered during a scheduled call to disclose the company’s quarterly and annual earnings report, had been much anticipated since financial troubles came to light this week with Toshiba and its subsidiary, Westinghouse. Westinghouse is the main contractor for the V.C. Summer project.

In the face of those financial concerns – Toshiba announced it would write down a $6.3 billion loss because of its nuclear operations – the Japan-based company issued SCANA and its partner, Santee Cooper, new assurances it was committed to finish building the new reactors.

However, Westinghouse and Toshiba also told SCANA the completion date for the Unit 2 reactor would be pushed back from August 2019 to December 2020, the same completion date for the Unit 3 reactor. At the least, there will be new costs added to the project because of these new delays, SCANA indicated.

Right now, SCANA does not have the details supporting those completion dates. The company is waiting to study those details.

“Once we have completed our evaluation, we will make you aware of any changes or implications this information may have,” Marsh said.

Despite Toshiba’s reaffirmation of plans to finish the work at V.C. Summer, SCANA is searching for ways to limit risk from the project, Marsh said.

“If for any reason Westinghouse exits the project, we will evaluate the facts and circumstances at that time to determine the most prudent action for our company and customers,” Marsh said. The company already has identified steps to put in place a new construction team, he said.

Because Toshiba’s credit rating dropped to speculative in December 2015, Marsh said, SCANA established a surety bond for the project, in the form of a letter of credit up to $100 million. The money would be used to assist in continued construction activity, which could include putting in place a new contractor.

SCANA also began escrowing the necessary intellectual property and software pertaining to the Westinghouse-designed AP1000 reactors, Marsh said, which are to be installed at the Summer plant.

Those contingencies offer SCE&G several options for putting in place a new construction team, Marsh said, that include SCE&G serving as the general contractor; entering into a new engineering and procurement contract; or entering into a new procurement and construction contract in which SCE&G acts as engineering contractor or contracts that service out.

Much of the equipment needed to complete work is already on site, SCANA said.

Since Tuesday, the Summer project has undergone intense scrutiny and criticism because of the Toshiba and Westinghouse disclosures.

Protestors gathered at the State House on Thursday to call on lawmakers to repeal the state’s Base Load Review Act, which allows SCANA to charge ratepayers for construction finance costs before the V.C. Summer project is completed.

SCANA reported earnings for the fourth quarter of 2016 of $124 million, or earnings per share of 87 cents per share, compared to $98 million, or earnings per share of 69 cents per share, for the fourth quarter of 2015.

This story was originally published February 16, 2017 at 7:26 PM.