trending Market Intelligence /marketintelligence/en/news-insights/trending/5RqQHuoJ8hCOUp9ERfY0WA2 content esgSubNav
In This List

SC regulatory staff seeks to dismiss nuke abandonment petition, rate hike

Blog

Insight Weekly: Global stock performance; hydrogen pilot projects; Powell's Fed future unsure

Blog

Insight Weekly Labor market recovery hurdles power market integration nonbank MA hunt

Blog

Q&A: Q2'21 Power Forecast: Overheated Power Markets are Here – Who Wins, Who Loses, and Why?

Blog

ESG & Technology: Impacts and Implications


SC regulatory staff seeks to dismiss nuke abandonment petition, rate hike

The South Carolina Office of Regulatory Staff has filed a motion asking state regulators to dismiss South Carolina Electric & Gas Co.'s petition for prudency regarding abandonment of the V.C. Summer nuclear project. The Office of Regulatory Staff, or ORS, also asked the Public Service Commission of South Carolina to close the docket or dismiss SCE&G's application for revised rates tied to the scrapped reactors.

SCE&G filed its petition "under inapplicable portions" of the Base Load Review Act, or BLRA, and it should be dismissed, according to regulatory staff. Specifically, the ORS contends in its Aug. 9 filing that the SCANA Corp. subsidiary's petition seeks cost recovery under a BLRA order intended to approve a revised construction schedule and budget, "which has no place in abandonment."

C. Dukes Scott, executive director of the ORS, pointed out that the motion is not indicative of the staff's stance on cost recovery and prudency for the nuclear abandonment.

"It has nothing to do with what we think of the merits of the proposal," Scott said. "It's not a condemnation of the process by any means."

Scott noted that SCE&G can refile its petition under the appropriate section of the BLRA.

SCE&G and project partner Santee Cooper on July 31 halted construction of the two new 1,117-MW reactors at the V.C. Summer nuclear plant in Jenkinsville, S.C. The decision was prompted by the March 29 bankruptcy of lead contractor Westinghouse Electric Co. LLC and billions of dollars in cost overruns.

SCE&G, in turn, submitted an Aug. 1 petition to the PSC seeking approval under the BLRA to create a regulatory asset for $4.9 billion in capital costs tied to the project and to amortize these costs over 60 years. SCANA Chairman and CEO Kevin Marsh told investors on an Aug. 3 earnings call that SCE&G will take a guaranteed payment from Toshiba Corp., Westinghouse's majority stakeholder, along with an anticipated $1.5 billion in tax deductions to whittle down these capital costs to more than $2 billion.

Toshiba in late July agreed to pay about $1.19 billion to SCE&G and approximately $976 million to Santee Cooper to fulfill obligations of Westinghouse tied to the V.C. Summer project. The net amount of the guarantee to be reflected in SCE&G's customer rate mitigation is estimated at about $700 million.

"By making the mitigating adjustments that are requested ... the revised rates required to reflect abandonment of the units should not result in any cost increase to customers compared to current rates for a number of years," SCE&G wrote in its petition. (SC PSC dockets 2017-244-E, 2017-246-E)

A spokesman for SCANA said in an Aug. 10 email that SCE&G will file a response to the regulatory staff motion by Aug. 21.

Meanwhile, South Carolina Gov. Henry McMaster is actively shopping state-owned utility Santee Cooper, known legally as the South Carolina Public Service Authority, to revive the V.C. Summer expansion or at least one of the reactors. However, these efforts may prove fruitless. SCANA Chairman and CEO Kevin Marsh on Aug. 10 reportedly told a panel of state lawmakers that the company would be reluctant to return to the project if it would still exceed the $14 billion budget approved in 2016 by state regulators.

"If it's beyond that, I don't know that it makes economic sense," Marsh said, The (Charleston, S.C.) Post and Courier reported.

"The governor has stated that he's looking for another partner to possibly come into the plant, but if someone says they're interested, that's not something that will happen overnight," Marsh said, according to the newspaper. "There are a lot of bridges that have to be crossed before we would get there."