is defending a requested $852 million construction costincrease for two reactors at the V.C. Summer nuclear plant from criticism by a newlyformed coalition of South Carolina businesses and civic groups.
TheSouth Carolina Small Business Chamber of Commerce joined the Sierra Club,League of Women Voters and several other groups on July 18 to form the Stop theBlank Check coalition to oppose both the additional construction costs and a$74.2 million, or approximately 3.1%, rate increase request by SCE&G to recover financingcosts of the nuclear expansion project.
subsidiary SCE&Gin May filed apetition seeking regulatory approval from the South Carolina Public ServiceCommission for a revised construction milestone payment schedule for the twoSummer reactors in Jenkinsville, S.C.
SCE&G'sproposed share of the project would increase roughly $1.38 billion to a fixedprice of about $7.68 billion, with expected completion dates of August 2019 forSummer unit 2 and August 2020 for unit 3. Originally, unit 2 was set to comeonline in April 2016, while unit 3 was projected to be completed in January2019.
SCE&Gowns a 55% interest in both units; its state-owned partner, Santee Cooper,known legally as the SouthCarolina Public Service Authority, owns a 45% stake. Originally, asapproved by the PSC in 2009, SCE&G's share of the costs was approximately$6.3 billion, while Santee Cooper's share was approximately $5.1 billion. TheSantee Cooper board of directors on June 30 voted to increase its share to $6.2 billion fora new total project cost of approximately $13.87 billion.
Thenew coalition took issue with the proposed additional construction costs, whichthey contend would make the overall costs for the project about 43% above itsoriginal budget. The groups said this would directly impact Santee Cooper'sretail and electric cooperative customers.
SCANAspokesman Eric Boomhower rejected the allegations and said the groups wereusing a preliminary figure instead of the original costs approved by regulatorsin 2009. If approved, the costs for both SCE&G and Santee Cooper wouldconstitute an overall $2.46 billion, or 21.6%, increase from originalestimates, Boomhower said. The $852 million cost increase is in addition to a revisedproject cost of $6.83 billion that was approved by the PSC in . He also saidSCE&G's additional construction costs would not affect Santee Cooper'sretail and cooperative customers as it would instead shift the risk of futureincreases on to WestinghouseElectric Co. LLC, the project's construction and engineering firm.
Thecoalition is also seeking a reduction in the rate hike, which it said wouldconstitute a 20% increase in energy bills since 2009 and is seeking legislativechanges to the state's Base Load Review Act. The groups blamed the 2007 law forenabling the rate hike and for allowing the nuclear project to be overbudgetand behind schedule.
"Ourmembers and constituencies we serve don't want to pay any more than necessaryfor constructing the nuclear plants," Frank Knapp, president and CEO ofthe South Carolina Small Business Chamber of Commerce, said in a news release."The Base Load Review Act has turned into a blank check for SCE&G andwill be so for future utilities that want to use it." Knapp said the lawprevents state regulators from being able to reject SCE&G's requests oncean initial project is approved.
Boomhowerdefended the Base Load Review Act for allowing SCE&G to adjust electricrates on an annual basis during construction to recover financing costsassociated with the project. Without the law, SCE&G would have to recoveran estimated $4 billion more in accumulated financing costs through consumerrates over the reactors' 60-year lifetimes, he said.