Scana Abandons Nuclear-Site Plans -- WSJ
August 01 2017 - 2:02AM
Dow Jones News
By Russell Gold
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 1, 2017).
Hopes for a U.S. nuclear renaissance dimmed Monday when the
owner of a partially built power plant in South Carolina pulled the
plug after its costs ballooned by billions of dollars.
The decision by Scana Corp. to abandon the V.C. Summer Nuclear
Station came months after reactor builder Westinghouse Electric Co.
filed for bankruptcy, in part because of massive cost overruns at
the South Carolina nuclear plant and a similar project owned by
Southern Co. in Georgia.
The nuclear plants were the only two being built in the U.S.,
which hasn't seen a new reactor built since the 1980s. Both use a
new Westinghouse design intended to be simpler and easier to
construct, but they have experienced escalating costs and delays.
The move to halt work on the South Carolina project will likely
prompt U.S. regulators and utility chiefs to think twice before
proposing any more nuclear plants.
The South Carolina power plant was about to get even more
expensive. Santee Cooper, a state-owned electric utility that was a
minority owner in the plant, provided figures that suggested the
final costs to build the facility by 2024 would swell to about
$25.7 billion. When first proposed in 2008, it was projected to
cost $11.5 billion. Before Monday, most recent projections called
for it to cost around $14 billion.
The sharply higher estimate raises questions about how much it
would cost to complete the Georgia plant. Jacob Hawkins, a
spokesman for Georgia Power, a unit of Southern Co., said the
company expects to wrap up a cost-to-complete analysis of the
project in August. Once finished, "we will work with the Georgia
Public Service Commission to determine the best path forward for
Georgia customers," he said.
Unexpected costs related to Westinghouse's first-of-its-kind
reactor and required changes to enhance safety caused the price of
the projects to rise. In March, Westinghouse filed for bankruptcy
amid rising costs associated with both plants, a situation that
imperiled its Japanese parent, Toshiba Corp.
Last week, Toshiba agreed to pay Scana and Santee Cooper $2.17
billion to cover its obligations, after reaching a similar
agreement with Southern.
Still, Santee Cooper's board of directors voted early Monday
afternoon to stop work on the South Carolina project, which
according to regulatory filings is about 35% complete. Shortly
afterward, Scana said it would file paperwork to abandon
construction, citing rising costs, uncertainty around federal
subsidies and Santee Cooper's pullout decision.
"While we respect Santee Cooper's decision, we are extremely
disappointed," Westinghouse President and CEO José Emeterio
Gutierrez said. "The South Carolina economy is sure to feel the
negative impact of losing over 5,000 high-paying, long-term jobs,
as well as not having available the reliable, clean, safe and
affordable energy these units would provide."
Critics said work at the Georgia plant should stop immediately.
"We also call on Georgia Power and their utility partners to
protect their customers from the similarly risky, mismanaged
project in Georgia at Southern Company's Plant Vogtle," said
Stephen Smith, executive director of the Southern Alliance for
Clean Energy.
South Carolina Gov. Henry McMaster called for public hearings on
the nuclear power plant. "Ratepayers have questions and they
deserve to have answers," said his spokesman, Brian Symmes.
State ratepayers have already paid $1.4 billion for the plant,
which comes to about 18% of a typical residential bill, said C.
Dukes Scott, executive director of the state's Office of Regulatory
Staff.
Westinghouse said in papers filed last week in New York
bankruptcy court that it had recently completed an updated business
plan that it would share with its creditors, including the owners
of the nuclear-power plant projects.
The company said its plan lays the groundwork for a
reorganization.
It is unclear what will happen to the two half-finished reactors
in South Carolina, located about 20 miles northwest of Columbia.
There is an existing reactor there that has been operating since
1984. It is expected to remain in service.
--Jonathan Randles contributed to this article.
Write to Russell Gold at russell.gold@wsj.com
(END) Dow Jones Newswires
August 01, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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