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Companies mum on interest in Santee Cooper, utility's stake in V.C. Summer

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Companies mum on interest in Santee Cooper, utility's stake in V.C. Summer

South Carolina Gov. Henry McMaster has reportedly identified three Southeast investor-owned utilities interested in purchasing Santee Cooper or its stake in the abandoned V.C. Summer nuclear project. These potential suitors, however, declined to confirm the talks.

McMaster on Aug. 9 specifically identified Duke Energy Corp., Dominion Energy Inc. and Southern Co. as companies that his office is in discussions with about buying Santee Cooper or acquiring the state-owned utility's portion of the reactors, The (Charleston, S.C.) Post and Courier reported. "We have a state-owned utility. I have told these power companies that it is for sale, some or all, everything's on the table," McMaster said during a tour of a solar plant, according to the newspaper.

"We don't have any comment on [the governor's] comments," a spokesman for Atlanta-based Southern said Aug. 9.

Richmond, Va.-headquartered Dominion Energy and Duke Energy, headquartered in Charlotte, N.C., also declined to comment on potential interest in buying Santee Cooper or its ownership in the project.

SCANA Corp. utility South Carolina Electric & Gas Co. and project partner Santee Cooper announced July 31 that they decided to halt construction of the two new 1,117-MW reactors at the V.C. Summer nuclear plant in Jenkinsville, S.C. The decision comes about four months after engineering, procurement and construction contractor Westinghouse Electric Co. LLC filed for bankruptcy.

Santee Cooper, known legally as South Carolina Public Service Authority, pulled out of the project after a comprehensive analysis determined it would cost roughly $25 billion to complete the reactors and would end up costing its customers a total of $11.4 billion.

SCANA Chairman and CEO Kevin Marsh told investors that the company still wanted to finish one of the reactors until Santee Cooper dropped out. In addition, SCANA and SCE&G sought out other utilities to take Santee Cooper's place and pursued government support as well, but to no avail.

Duke

Duke Energy bowed out of buying a 5% to 10% ownership interest in V.C. Summer from Santee Cooper in 2014.

Broadly speaking, Duke Energy spokesman Rick Rhodes on Aug. 9 acknowledged the company would be opportunistic with its portfolio.

"We are a company that always looks for opportunities and those opportunities can come in many forms. But as far as any specific information of what we're looking at, we just can't comment on [that]," Rhodes said. "But we're like the rest of the industry, you know, we're watching this unfold — especially the industry with nuclear plants. We're watching with a lot of interest ... because we have Westinghouse-designed units that we have in the proposal stage as well."

Duke Energy has received operating licenses from the U.S. Nuclear Regulatory Commission for the 2,200-MW Levy Energy Complex in Florida and the 2,234-MW William States Lee III Nuclear Station in South Carolina. The NRC licenses authorize Duke Energy subsidiaries to build and operate the same Westinghouse-designed AP1000 nuclear reactors abandoned at V.C. Summer.

In an Aug. 3 phone interview with S&P Global Market Intelligence, Duke Energy Executive Vice President and CFO Steven Young said nuclear generation remains a "valuable resource" with the proposed reactors a "very prudent" option for the company to maintain.

The CFO, however, again dismissed the idea raised by at least one analyst that Duke Energy would target SCANA given the V.C. Summer woes.

"We'll keep our finger on the pulse of what is out there. But right now, our focus is on the organic side of our business," Young said.

Under review

Following South Carolina Senate President pro tempore Hugh Leatherman's decision to appoint a special committee to review abandonment of V.C. Summer and utility regulation in the state, House Speaker Jay Lucas on Aug. 9 announced the formation of a similar committee.

The House Utility Ratepayer Protection Committee, made up of lawmakers that represent constituents in SCE&G and Santee Cooper's service territories, is expected to begin meeting within the next few weeks. Both the Senate and House committees were formed in response to South Carolina Senate leaders' calls for a special session to block further rate hikes tied to V.C. Summer until the General Assembly returns in January 2018.

"I have encouraged the committee to review and potentially repeal the Base Load Review Act and examine the Public Service Commission's authority. The state has a responsibility to fully investigate this situation and ensure ratepayers do not experience this kind of failure again," Lucas said in a news release.

Lucas said he will call for a special session of the state legislature after the committee's review is complete and "if a viable solution requires General Assembly action."