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South Carolina Electric & Gas Company (SCE&G) recently announced that it will cease construction of two new nuclear units at the V.C. Summer Nuclear Station in Jenkinsville, South Carolina. The decision was reached by SCE&G after considering the costs to complete the units, the uncertainty regarding the tax credits for the project, the amount of anticipated settlement payments from Toshiba, and other matters associated with continuing construction, including the decision of the South Carolina Public Service Authority (Santee Cooper) to suspend construction of the project. Based on these factors, SCE&G concluded that it would not be in the best interest of its customers and other stakeholders to continue construction of the project.
Following the bankruptcy filing of Westinghouse Electric Co. (WEC), SCE&G and Santee Cooper began evaluating the most prudent path forward for the units. The project owners worked with WEC and Fluor Corporation, as well as other technical and industry experts, to evaluate the project costs and schedules. Based on this evaluation and analysis, SCE&G concluded that completion of both units would be prohibitively expensive.
According to SCE&G's analysis, the additional cost to complete both units beyond the amounts payable in connection with the engineering, procurement and construction contract would materially exceed prior WEC estimates, as well as the anticipated settlement payments from Toshiba. In addition, the units would need to be online before Jan. 1, 2021, to qualify for production tax credits. SCE&G's analysis concluded the units could not be brought online until after this date.
SCE&G also considered the feasibility of completing the construction of Unit 2 and abandoning Unit 3 under the existing ownership structure and using natural gas generation to fulfill any remaining generation needs. The company had not reached a final decision regarding this alternative when Santee Cooper determined that it would be unwilling to proceed with continued construction of two units or one unit. Consequently, SCE&G determined that it was not in the best interest of its customers and other stakeholders for it to continue construction of one unit.
Normal construction activities at the site will cease immediately, and efforts will be shifted toward an orderly transition of winding down and securing the project property. SCE&G plans to use the anticipated payments resulting from the settlement of Toshiba's guarantee to mitigate cost impacts to its customers.
For more information, visit www.sceg.com.