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Southern Co., SCANA lobbied Trump administration for federal grants for nukes

Southern Co. and SCANA Corp. executives sought federal grants from the Trump administration for their costly nuclear expansion projects in Georgia and South Carolina before SCANA pulled the plug on the two new reactors that were eight years from being finished.

Details of SCANA's lobbying attempts to acquire possibly up to $3 billion in financial support from the U.S. government came to light during the Aug. 1 briefing of South Carolina's Public Service Commission by SCANA and its subsidiary, South Carolina Electric & Gas Co., or SCE&G, on the utility's decision to halt construction of its 2,234-MW V.C. Summer expansion project outside of Columbia, S.C.

SCANA's cancellation of the two AP1000 units was announced on July 31, after their state government-run partner, Santee Cooper, also known as South Carolina Public Service Authority, voted to pull out of the project following the March 29th bankruptcy filing by nuclear plant builder, Westinghouse Electric Co. LLC.

SCANA CEO Kevin Marsh relayed to regulators that the utility had lobbied the federal government to pay for construction cost overruns that exceeded the V.C. Summer project's regulatory-approved $7.7 billion fixed-price option.

"We've had very direct discussions with high officials in the White House, the Department of Energy and other connected people to the energy business or sector in Washington," said Marsh. "We went as high as Rick Perry, Secretary of Energy, in the last meeting we had up there and we've not gotten a response."

Joining SCANA in its trips to Washington, D.C., in search of government support were representatives of Southern Co., whose subsidiary Georgia Power Co. is the majority owner of a 2,220-MW expansion of the Alvin W. Vogtle Nuclear Plant in Georgia, where two other AP1000 reactors are being built. Since 2009, the Georgia utility has incurred more than $5 billion in costs for their 45.7% project share and is currently assessing whether to carry on with the project.

"It was a very clear request [for a grant]," said Marsh. "We made it known to everybody we talked to what we were looking for and Southern Company asked for the same thing because their cost estimates, I suspect, will be in the same range of ours."

As reported by Axios, a DOE official confirmed that SCANA requested a federal grant of between $1 billion and $3 billion. According to Marsh, the DOE offered SCANA a loan guarantee instead. Vogtle already has a $8.3 billion federal loan guarantee.

While SCANA did not immediately return a request for comment, Southern Co. spokesperson Schuyler Baehman confirmed in a statement that Georgia Power's parent company continues to talk with the Trump administration and Congress about Vogtle.

"If we decide to go forward with the Vogtle project, we will work with DOE and Congress to make any necessary adjustments in existing programs to support the project going forward," said Baehman. "Their support to date has been critical."

In its recent prudence review, SCE&G had concluded that the completion dates for V.C. Summer units 2 and 3 were Dec. 31, 2022, and March 31, 2025, respectively, at a projected cost of $8.8 billion for SCE&G's share. This projected cost includes $1.1 billion in guaranteed payments from Westinghouse's majority owner, Toshiba Corp.

In comparison, Georgia Power would receive $1.7 billion of their share of the Toshiba payments for Vogtle. Southern's most recent assessment estimates in-service dates of between February 2021 and March 2022 for Vogtle unit 3 and between February 2022 and March 2023 for unit 4.

In June, the U.S. House of Representatives sought to throw a lifeline to both nuclear projects by unanimously passing legislation that seeks to extend $5.2 billion-worth of nuclear production tax credits beyond an in-service 2021 deadline for Vogtle's and Summer's four new reactors. The bill is currently waiting for a vote in the Senate.

Nuclear opponents have jumped at the demise of V.C. Summer's expansion as an opportunity to push for a similar cancellation of Vogtle and to prevent other "bailouts" of nuclear plants that are unable to compete in markets awash with cheap natural gas supplies.

Summer and Vogtle "proved that for all the favors granted to new nuclear in federal and state legislation a decade ago, it remains unable to forecast and control its cost and schedule," said Peter Bradford, a former commissioner of the U.S. Nuclear Regulatory Commission, during a Aug. 3 media briefing held by the Nuclear Information and Resource Service. "Most importantly, even if it could meet its forecast, it would still be uncompetitive with other electricity resources."