SCE&G and VC Summer: By the numbers
SCE&G withdrew plans Tuesday to charge ratepayers billions of dollars more for a nuclear expansion project the company does not intend to complete.
SCE&G’s decision to drop a legal petition to abandon the project and charge customers effectively delays any electricity bill increases SCE&G customers might have to pay for the twin-reactor project in Fairfield County.
It does not mean the company is seeking to restart the project, but it does give state leaders time to discuss the company’s decision last month to walk away from the construction effort, according to the state Office of Regulatory Staff.
SCE&G needs the approval of the state Public Service Commission to formally abandon the plant and — through rates charged to customers — get back money it has spent. The company has said it wants to charge customers at least $2.2 billion extra for the project. Customers have already paid $1.4 billion.
Under state law, however, the PSC would have had to decide on the abandonment plan by Feb. 1, said regulatory staff director Dukes Scott. The agency would have had to say whether the abandonment and the costs were considered “prudent,’’ Scott said.
Now, the Legislature and state policy makers have breathing room to debate how — and whether — the company should recover costs of the failed project through customer rates. Customers could be charged at a later date if the company seeks to file another petition with the PSC. SCE&G’s decision Tuesday also would allow boosters of the project time to seek other utilities to restart the project, although the prospects of that happening, so far, appear to be dim.
“It’s great news for ratepayers in the sense that it allows the General Assembly to come to a fair resolution to represent their constituents,’’ Scott said. “I think it’s great for customers.”
The company’s decision follows project partner Santee Cooper’s decision last week to drop rate increases that would have bankrolled the nuclear project.
SCE&G, a division of SCANA, sent out a statement Tuesday afternoon announcing its decision. On July 31, the company said it would discontinue work on the V.C. Summer expansion project after Santee Cooper said it would not continue the effort because of rising project costs. The companies collectively spent $9 billion and nine years working on the project northwest of Columbia. The decision left 5,000 construction workers unemployed.
Eric Boomhower, a spokesman for SCE&G, emphasized that the company still has no plans to restart construction at the V.C. Summer plant. The bankruptcy of chief contractor Westinghouse, along with higher costs and the time it would take to finish the work, makes dropping the project the company’s best option, the company says. The project was initially supposed to cost about $11 billion, but costs had risen to an estimated $20 billion or more.
“Our decision to withdraw the filing does not mean we are reconsidering the decision to cease construction of V.C. Summer Units 2 and 3,’’ Boomhower said in an email. “We believe it would be appropriate to allow more time for our state’s government officials to fully review and understand how we arrived at our decision to file for abandonment.’’
The day after SCE&G said it would not continue the nuclear construction effort, the company filed a petition with the PSC to formally abandon the project. The company said it wanted to recover $4.9 billion for the plant costs and include a return for investors. But the company said it would use a corporate guarantee from Westinghouse’s parent, Toshiba, and a tax break to cut the amount it needs from ratepayers to $2.2 billion. The company said the Toshiba money and the tax break would offset any rate increases for the short-term, but made no pledges not to raise rates in the future. The company planned to charge ratepayers over 60 years.
The company’s decision to withdraw its abandonment plan had been rumored since last week. SCE&G has been meeting with lawmakers. The company said it made its decision to withdraw the petition after hearing concerns from state policy makers and others. The decision will give the state time to review the July 31 announcement to discontinue the project.
State lawmakers have formed a review panel that will meet next week. Some, including Rep. James Smith, D-Richland, say customers should not be hit for more costs of a nuclear plant that won’t be constructed. State law allows SCE&G to seek to recover costs of a nuclear project, even if it isn’t finished. Smith said he expects the company to seek to recover its costs through customer rates at a later date, if the Legislature does not take action.
“This loss should be borne by the shareholders, not the ratepayers,’’ Smith, a vocal critic of SCE&G’s nuclear project, said of the costs. “I will fight to make that case. This was just fundamentally a business judgment and a poor business judgment.”
In its statement, SCE&G said the company heard those kinds of concerns.
“We have been meeting with governmental officials and various stakeholders since our announcement to abandon the new nuclear project," said Kevin Marsh, SCANA chairman and CEO.