The contractors building two new reactors at SCE&G’s V.C. Summer nuclear plant in Fairfield County said Thursday it would cost an additional $1.2 billion to finish the work there.
However, SCE&G indicated they have not agreed to the consortium’s new cost estimates nor any projected new completion dates.
Cayce-based SCANA Corp., the parent company of the electric utility, released a statement Thursday afternoon saying its construction and design consortium, primarily Chicago Bridge & Iron Co. and Westinghouse, informed them the increased preliminary cost estimates are needed to support project delays announced in August associated with engineering problems, fabrication and procurement of components and construction issues.
SCE&G, which owns 55 percent of the new two-reactor project, would be charged an additional $660 million to reach completion of the project, and Santee Cooper, which owns the remaining 45 percent, would be charged an additional $540 million to cover completion costs, SCANA said.
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The CB&I and Westinghouse consortium told SCANA in August they were undertaking a full re-baselining of the V.C. Summer plant’s Unit 2 and Unit 3 new reactors due to projected delays that would move completion of the Unit 2 reactor back to late 2018 or early 2019 and Unit 3’s completion back a year beyond that to at least late 2019.
The $1.2 billion revised cost estimate issued by the engineering and construction consortium Thursday is in 2007 dollars, SCANA’s announcement said, “and would be subject to escalation.”
“It also excludes any owner’s cost amounts associated with the delays, which amounts could be significant,” the SCANA statement read. “The consortium’s preliminary schedule and the cost estimate information are under review by SCE&G and Santee Cooper, and it is anticipated that further study, evaluation and negotiations will occur,” SCANA said.
The two new reactors at Summer initially were supposed to cost $9.8 billion, which SCE&G has been allowed to begin collecting from ratepayers prior to power generation under the state Base Load Review Act. Charging customers up front is projected to cut finance costs of the project, ultimately costing ratepayers less.
If the increased costs are to be added to the total cost of the reactor, SCE&G and the consortium will have to negotiate whose responsibility those increased costs fall to – SCE&G and its ratepayers or the consortium, which has had multiple delays with fabrication and delivery.
The same concept applies for reaching an agreement on when the reactors are to be completed. Whatever the new considerations are will have to be approved by the S.C. Public Service Commission.
“At this point, we cannot predict when the revised schedule and cost estimate will be finalized,” said Eric Boomhower, SCE&G public affairs manager.
“Once a revised schedule and cost estimate are complete, if the schedule and/or the capital costs were to exceed what is currently approved by the Public Service Commission of South Carolina, we would expect to petition the PSC for an order to update the construction milestone and capital cost schedules,” he said.
“The Base Load Review Act provides that the commission would grant the petition as long as it is determined that the change is not the result of imprudence on our part. At that point, we would assess the potential impact on future rate adjustments under the BLRA.,” Boomhower said.
Last week, SCE&G residential customers were hit with an average $49 a year increase on their electric bills starting this month – the seventh rate increase passed along to customers since construction of the new reactors began in 2008.
The Public Service Commission approved this latest 2.92 percent residential rate hike to help cover $66.2 million in construction costs for the two new reactors at the Summer Nuclear Station in Jenkinsville, about 25 miles northwest of Columbia.
The average monthly residential bill will rise $4.11 to $146.40 as a result of this latest rate hike, SCE&G said, and those new rates take effect Oct. 30.