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Trump could kill Westinghouse bankruptcy deals to safeguard national security

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Trump could kill Westinghouse bankruptcy deals to safeguard national security

The federal agency in charge of reviewing national security implications of foreign influence in businesses has threatened to investigate any transactions made by the bankrupt contractor of the Vogtle and V.C. Summer nuclear expansion projects in Georgia and South Carolina.

Amid speculation that Chinese government-owned companies want to acquire Westinghouse Electric Co. LLC, the federal Committee on Foreign Investment in the United States filed a letter June 5 with the U.S. Bankruptcy Court, Southern District of New York, warning that any possible sale of assets owned by the nuclear contractor to foreign businesses could trigger scrutiny. The letter also said President Donald Trump could end up deciding on the matter and even kill any foreign merger, acquisition or takeover as authorized by the Defense Production Act of 1950. Chaired by the U.S. secretary of the Treasury, the committee is made up of the heads of various executive agencies and departments.

U.S.-based Westinghouse, which is majority-owned by Japanese conglomerate Toshiba Corp., filed for Chapter 11 bankruptcy (Case 17-10751) in March after incurring $6.3 billion in losses from building four Westinghouse AP1000 reactors at Alvin W. Vogtle and V.C. Summer nuclear power plants that are billions over budget and years behind schedule. Toshiba has been vocal about its desire to sell Westinghouse from the start of the bankruptcy proceedings.

The utilities involved in each expansion project currently are assessing whether to carry on construction without Westinghouse. In Georgia, Vogtle project owners Southern Co. subsidiary Georgia Power Co., Oglethorpe Power Corp., Municipal Electric Authority of Georgia and Dalton Utilities are slated to decide by June 9. Westinghouse estimates it will cost an additional $2.5 billion on top of Vogtle's current $16 billion budget to finish its two reactors.

In comparison, the now $14 billion V.C. Summer project is nearly $3 billion over its original budget. Westinghouse estimates completing the new units will cost SCANA Corp. subsidiary South Carolina Electric & Gas Co. and the state-ran South Carolina Public Service Authority, better known as Santee Cooper, an additional $1.5 billion.

SCANA spokesman Eric Boomhower said the utility does not believe that a possible federal investigation would have a significant impact on its current prudence assessment of V.C. Summer units 2 and 3.

"A review such as this is a normal part of the process that was to be expected," Boomhower said. "In fact, there was a similar review in 2012 when Shaw was acquired by [Chicago Bridge & Iron Co. N.V., or CB&I] and in 2015 when Westinghouse acquired the nuclear construction business from CB&I."

Southern Co. said in a statement that the company still is assessing Vogtle, but it failed to address how a federal investigation could impact the future of the project.

Santee Cooper did not immediately return requests for comment.