Letters: SCE&G nuclear plants all about the money

The real reason SCE&G wanted to build two new nuclear plants with Santee Cooper was for the 10.5 percent to 11 percent return on a very large capital project. First projected to cost $9 billion, the nuclear reactors would provide revenue sufficient to cover both the substantial debt incurred over the years and the dividends required to prop up the stock price. All of this revenue would come from the ratepayers; after all, it worked the first time with Unit 1.

The real cost of units 2 and 3 can easily be projected from the current offering price. If you order a twin unit AP-1000 today, the asking price is $22 billion; that is why none have been ordered. It makes no financial sense … unless you are a monopoly.

If the units are canceled, as they should be, the financial house of cards will collapse. The revenue stream required to service debt and pay dividends that prop up stock price will not exist. This leaves the utility with only hard assets to back up these debts. The real value of obsolete steam power plants, both fossil and nuclear, if they were to be sold, will be significantly less than book value, leaving little if any stockholder value.

After the Duke/Progress Energy debacle, there is little chance that a neighboring utility will tender an offer that would save stockholders. The die has already been cast. Monopolies are very inefficient and ultimately lead to their own demise.