Santee Cooper debt must be addressed, McMaster says
Three days after the lead contractor of South Carolina’s failed nuclear power project sued Santee Cooper over the project’s leftover equipment and parts, Santee Cooper publicly condemned the lawsuit as a “desperate money grab” that would siphon money from S.C. power customers.
In a written statement Monday, the state-owned utility said the lawsuit from Pennsylvania-based Westinghouse Electric Company “seeks to strip value away from Santee Cooper customers and instead profit itself.”
Santee Cooper and investor-owned SCE&G hired Westinghouse a decade ago to design and build two nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County. But they quit the $9 billion project in July 2017 after years of cost overruns and construction delays, and months after Westinghouse declared bankruptcy in March 2017.
In its statement Monday, Santee Cooper said Westinghouse’s lawsuit would take money that could go toward lowering South Carolinians’ power bills and deliver it to “the very contractor whose bankruptcy avoided its responsibilities and contributed so greatly to the project failure.”
“Westinghouse’s claim is unconscionable, especially when considered in light of the circumstances, and is a desperate money grab attempt,” Santee Cooper wrote.
Late Friday, Westinghouse filed a lawsuit accusing Santee Cooper of thwarting efforts to sell “tens of millions of dollars” worth of nuclear equipment, parts and materials left abandoned at the Fairfield County site in July 2017.
Westinghouse claims it owns some of that equipment and complained Santee Cooper was refusing to let Westinghouse sell it, squandering deals potentially worth millions of dollars.
In a statement Monday, Westinghouse spokeswoman Courtney Boone said the contractor wants to sell the equipment now and put the proceeds in a bank account until the companies reach a resolution deciding who gets the money.
The company says Georgia-based Southern Co. has submitted an offer for some of the parts for its own nuclear project, but that offer expires on April 17.
“We are puzzled by Santee Cooper’s continued stonewalling, particularly in light of the urgent and special nature of this opportunity,” Boone said. “It was this stonewalling that has spurred Westinghouse’s action.”
Santee Cooper, however, reiterated its position Monday that it owns the entire site and all of the generators, pumps, turbines, rebar, pipes, cables and other materials on it. The utility is working to sell that equipment and use the proceeds to pay off its $4 billion debt from V.C. Summer, and it doesn’t want to share with Westinghouse.
The proceeds could help lessen the rate hikes that are expected over the next four decades as Santee Cooper pays off V.C. Summer. But Santee Cooper hasn’t sold any of the equipment yet, spokeswoman Mollie Gore said. She added Santee Cooper has only been able to sell the equipment since December 2018, when SCE&G signed an agreement giving its 55 percent stake in the site to Santee Cooper.
Gore told The State Santee Cooper has spent about $5 million so far to maintain and protect that equipment, while Westinghouse has spent nothing. Santee Cooper’s board has OK’d spending another $6 million through the end of 2019 to preserve the equipment for a possible sale.
Westinghouse and Santee Cooper have a turbulent past. Over the course of the V.C. Summer project, Santee Cooper and SCE&G executives regularly complained about Westinghouse’s performance in building the project, including missed deadlines, budget overruns and shoddy engineering designs.
Westinghouse’s bankruptcy in March 2017 all but cemented the project’s fate.
Santee Cooper said Monday Westinghouse’s claim to the equipment is moot because it is based on a provision of the V.C. Summer construction contract that Westinghouse rejected in bankruptcy court.
SCE&G gave its ownership stake in the site to Santee Cooper, wiping its hands in an effort to show it has abandoned the project.