VC Summer Nuclear Generating Station tour of the new reactors being built
Two nuclear reactors under construction in Fairfield County are projected to cost an additional $1.5 billion, but SCE&G officials continued to express hope Wednesday that the project could be completed – despite financial problems encountered by the project’s chief contractor and its parent company.
After Westinghouse Electric Co. filed for bankruptcy last month, utility executives said they believed the project could be finished because of financial guarantees from the company’s parent corporation, Toshiba. Now, Toshiba is itself in financial trouble and may not be able to make good on those commitments, Toshiba indicated this week.
At a meeting with the state Public Service Commission, SCE&G leaders said they may be able to draw down on assets from Westinghouse Electric's other businesses to help pay for the project. One of those assets is the company’s Bluff Road atomic fuel factory southeast of Columbia, a top utility executive said after the meeting.
Jimmy Addison, chief financial officer for SCE&G’s parent corporation, SCANA, said the sale of the Bluff Road plant and other businesses by Westinghouse could generate revenue to complete the nuclear plants at the V.C. Summer power station near Jenkinsville. Santee Cooper, the state-owned utility, is a partner with SCE&G in the project.
“They have very profitable businesses, including the fuels business that is operated here,’’ Addison said of Westinghouse after he briefed the PSC. “It’s a well-run business. Those businesses are likely to be sold and they are going to generate a substantial source of cash for the bankruptcy court. And it will be disbursed to the creditors. We are one of those. Santee (Cooper) is one of those.’’
One of the biggest questions on many people’s minds is whether continuing the project will cost ratepayers more money. SCE&G has levied nine rate increases to pay for the project. SCE&G struck a deal last year not to raise rates to cover certain additional costs, but that deal could be changed by the PSC.
The average residential SCE&G customer now pays about 18 percent of his or her electric bill for construction of the nuclear plants, which is about $27 a month, according to the Southern Alliance for Clean Energy, a regional group critical of the project. The rates are among the highest in the country, environmentalists said.
SCANA officials emphasized that they are still investigating the viability of continuing the nuclear project and will not have an answer until the end of April, at the earliest. It’s possible the project could be scrapped, said SCANA chief executive Kevin Marsh. The company hopes to gain up to 60 additional days to conduct the assessment. Utility officials now are checking figures, including the $1.5 billion increase reported by Westinghouse to SCE&G, officials said.
Toshiba had pledged up to $1.7 billion to help complete the project in the wake of Westinghouse’s bankruptcy. About $940 million of that would go to SCE&G, the PSC was told Wednesday. The atomic reactor project, expected to cost $14 billion but possibly higher, is about $3 billion over budget and years behind schedule. Construction work at the site is about 34 percent completed. The project now employs about 5,000 people and is continuing pending a final decision on its future.
Wednesday’s hearing at the Public Service Commission attracted a larger crowd than usual. Opponents of the nuclear plant project handed out literature urging the work be canceled to limit future costs to ratepayers. One flier was a mock “Wanted’’ poster that blasted the PSC and the state Office of Regulatory Staff for “conspiring with S.C. utilities to defraud ratepayers.” The poster included photographs of Public Service Commission members.
Among the groups represented at the meeting were the Sierra Club and the Southern Alliance for Clean Energy, a regional organization critical of both the South Carolina project and another project in eastern Georgia.
“Very simply, this is a mess that exemplifies the high risks associated with new nuclear generation that all of us here today repeatedly warned utilities, regulators and state and federal lawmakers of,’’ the alliance’s Sara Barczak said in a statement.
Anti-nuclear activist Tom Clements and Bob Guild, a Columbia attorney opposed to the atomic power project, said they doubt SCE&G will ever see money guaranteed by Toshiba to pay SCE&G and Santee Cooper. And Clements noted that Westinghouse has plenty of debts to pay.
Critics say SCE&G should stop building the nuclear reactors before ratepayers are hit with more hikes in their monthly power bills. The latest cost estimates for the project are $14 billion.
“The question is how do you minimize the pain for everybody who is paying the bill,’’ Guild said. “I’d rather see SCE&G go bankrupt than force their customers to pay profits to their stockholders — and if we have a public policy that allows that to happen, there’s going to be heck to pay.’’
The power company was able to raise rates to finance the cost of construction because of a 2007 law approved by the S.C. Legislature. Before the law passed, SCE&G could not have charged customers up front. The company has said it wants to finish the project because it needs the energy from two new nuclear reactors to provide power.
Meanwhile Wednesday, SCANA officials said U.S. Sen. Tim Scott, R-S.C., and Rep. Tom Rice, R-S.C., have introduced legislation in Congress to extend a deadline for the company to gain a nuclear plant production tax credit of about $2 billion. The plants must be finished by the end of 2020, but are in jeopardy of not making a deadline to qualify for the credits. The $2 billion would go to ratepayers, Addison said.