South Carolina's governor is reportedly exploring a range of options to salvage at least one of the abandoned V.C. Summer reactors, while some state lawmakers push for a special legislative session to temporarily halt future rate hikes tied to 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.
SCANA Chairman, President, CEO and COO Kevin Marsh told investors the company still wanted to finish one of the new reactors until state-owned utility Santee Cooper, known legally as the South Carolina Public Service Authority, dropped out of the expansion project. Santee Cooper had concluded that it would cost roughly $25 billion to complete and would end up costing its customers a total of $11.4 billion.
Gov. Henry McMaster, however, is reportedly weighing several options to revive the V.C. Summer expansion, including the sale of Santee Cooper's 45% stake in the project or the utility itself, according to The Wall Street Journal and The State newspaper in Columbia, S.C.
"Governor McMaster will continue to explore all options available to him as long as there is any hope to continue the project and protect the ratepayers who have paid for it," Brian Symmes, press secretary for the governor's office, said in an emailed response to the reports.
Santee Cooper spokeswoman Mollie Gore noted that the reports are based on an anonymous source but confirmed that the utility is actively pursuing the sale of its stake in the project.
"What I can tell you is that Santee Cooper has been exploring the possibility of selling a portion of our share since 2010," Gore said.
"Our board, when they made this decision last week, specifically instructed our management team to go out and look for potential additional resources, including, again, additional partners who could buy into the project, our share of the project," Gore said. "So, that is something that we would not only be agreeable to, but are actively pursuing and have been for some time."
Duke Energy Corp. bowed out of buying a 5% to 10% ownership interest from Santee Cooper in 2014, while SCE&G in turn announced it would increase its ownership stake in the units by acquiring an additional 5%.
SCE&G has requested approval from the Public Service Commission of South Carolina to create a regulatory asset for the $4.9 billion in capital costs incurred and anticipated through Sept. 30 and to amortize these costs over 60 years. SCE&G also proposed mitigating adjustments to the revised rates required to reflect abandonment of the units and indicated that as a result, the proposal "should not result in any cost increase to customers compared to current rates for a number of years."
Part of these mitigating adjustments will be guaranty obligations paid by Westinghouse parent Toshiba Corp.
Toshiba on July 27 agreed to pay approximately $2.17 billion to SCE&G and Santee Cooper in full satisfaction of its guaranty of obligations of Westinghouse Electric. The Japanese conglomerate will pay about $1.19 billion to SCE&G and approximately $976 million to Santee Cooper.
"We have committed to the Public Service Commission of South Carolina that customers will get all of the benefits from the anticipated proceeds from the Toshiba settlement for the failure of their affiliate, Westinghouse, to complete the project," Marsh said in an Aug. 4 open letter to customers, employees, regulators and lawmakers.
Still, some South Carolina Senate leaders have asked for a special session of the General Assembly to block any rate hikes until the legislature returns in January 2018, The State reported. In addition, South Carolina Attorney General Alan Wilson is pushing for a delay in any PSC action on a rate increase until he completes an investigation into abandonment of the project. Wilson's office did not immediately respond to a request for comment on Aug. 8.
Senate President Pro Tempore Hugh Leatherman on Aug. 8 announced a special committee to review abandonment of the V.C. Summer project and the role of utility regulators. Leatherman did not immediately respond to a request for comment Aug. 8, nor did SCE&G.