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V.C. Summer developers ordered to increase payments to nuclear contractor

SNL Image

Workers placed the reactor vessel in the containmentbuilding of V.C. Summer Unit 2 in August 2016.

Source: South Carolina Electric & Gas Co.

Joint owners of two new nuclear units at the station in SouthCarolina must compensate their engineering, procurement and constructioncontractor Westinghouse ElectricCo. LLC $133 million in October and $136.5 million in November asmilestone payments, a legal board said.

South CarolinaElectric & Gas Co., a subsidiary of that owns 55% of the newunits, along with Santee Cooper, known legally as and owns 45% of the project, received instruction from adispute resolution board to pay Westinghouse higher payments in October andNovember instead of following a previously set fixed payment of $100 millionper month, according to SCANA's Oct. 3 release.

"This portion of the Order is based on the DRB'sfindings concerning the approximate value of the work expected to be completedduring these months," SCANA said in the release.

The board emerged in October 2015 after the parties couldnot agree to the timing and payment amounts for the new pressurized waterreactors. In the event that a full and final resolution is not reached by Nov.3, the board will conduct a further hearing and make its determination by Nov.30.

The two units, each 1,117 MW, will be located on the samesite in Jenkinsville, S.C., as the 970-MW unit 1, which began operating in 1984.

The order comes as the two parties on May 26 petitioned thePublic Service Commission of South Carolina to approve an updated schedule tocomplete construction for unit 2 by Aug. 31, 2019, and unit 3 by Aug. 31, 2020,which is a delay from the original completion dates of April 2016 for unit 2and January 2019 for unit 3. The instruction also comes as the two utilities onSept. 1 reached asettlement agreement with several electric cooperatives: the South CarolinaEnergy Users Committee, the Small Business Chamber of Commerce and the stateOffice of Regulatory Staff, who will lower the overall capital costs of the twounits to about $7.66 billion from $7.68 billion. The PSC has yet to approve thesettlement agreement, but will begin public hearings on Oct. 4 regarding theupdated capital costs and completion dates, according to Sept. 15 commissionnotice.