South Carolina Electric & Gas Company (SCE&G) and Santee Cooper have announced their decision to abandon their previous plans of building two new nuclear reactors at the VC Summer Nuclear Station in South Carolina.
Construction of the two new nuclear units will be ceased with immediate effect said SCE&G. The principal subsidiary of SCANA now plans to seek the approval from the Public Service Commission of South Carolina for its abandonment plan.
SCE&G says that its decision was made after considering the additional expenditure it will have to bear to complete the units along with the uncertainty looming over the project’s qualification for production tax credits.
It also said that the construction plans have been scrapped after taking into account Toshiba’s guaranty settlement payments and the decision of Santee Cooper, the co-owner of the project, among others.
SCANA chairman and CEO Kevin Marsh said: “We arrived at this very difficult but necessary decision following months of evaluating the project from all perspectives to determine the most prudent path forward.
“Many factors outside our control have changed since inception of this project. Chief among them, the bankruptcy of our primary construction contractor, Westinghouse, eliminated the benefits of the fixed-price contract to our customers, investors, and other stakeholders.”
Santee Cooper on its part said that its decision to abandon the project would save $11.4bn for its customers. It has already spent close to $4.7bn for the construction and interest to date relating to its 45% ownership share.
It also added that the project is not expected to be completed until 2024 which means a delay of four years considering the most recent completion date given by Westinghouse.
Santee Cooper president and CEO Lonnie Carter said: “After Westinghouse’s bankruptcy and anticipated rejection of the fixed-price contract, the best case scenario shows this project would be several years late and 75 percent more than originally planned.
“We simply cannot ask our customers to pay for a project that has become uneconomical. And even though suspending construction is the best option for them, we are disappointed that our contractor has failed to meet its obligations and put Santee Cooper and our customers in this situation.”
The proposal to build Units 2 and 3 of the nuclear station in Jenkinsville was filed jointly by the partners in 2008. However, it could not materialize following the bankruptcy of Westinghouse Electric along with other problems.
Last week, an agreement was reached where Westinghouse’s Japanese parent, Toshiba had agreed to compensate SCE&G and Santee Cooper, a combined sum of $2.168bn for not fulfilling the contract to build the two nuclear reactors.
Image: V. C. Summer Nuclear Station Unit 1 in South Carolina. Photo: courtesy of DJSlawSlaw/Wikipedia.org.