Utilities ditch reactors that launched U.S. nuclear renaissance
By Harriet McLeod
COLUMBIA, S.C. (Reuters) - South Carolina utilities said on Monday they are abandoning two unfinished reactors that were hailed as the start of a U.S. nuclear power renaissance before they were dogged by billions of dollars in cost overruns.
The twin-reactor project known as V.C. Summer is majority owned by SCANA Corp, with state-owned utility Santee Cooper owning 45 percent.
"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," said SCANA Chief Executive Officer Kevin Marsh in a statement.
The project was expected to begin producing power last year, but is less than 40 percent complete due to construction problems, disputes with regulators and poor quality work.
A presentation to Santee Cooper's board showed the estimated cost to complete the project had soared 75 percent and the project was not expected to begin producing power until 2023, more than six years behind the original schedule.
The utilities blamed the delays and rising estimated cost on the bankruptcy of Westinghouse Electric Co, which designed and had been constructing the V.C. Summer project when it filed for bankruptcy in March. Westinghouse was also building a similar nuclear power plant in Georgia known as Vogtle.
The projects were the first new U.S. reactors since the 1979 Three Mile Island accident, and were expected to usher in a new era of nuclear plants that were safer to operate, cheaper to build and carbon free.
Instead, Pittsburgh-based Westinghouse said in March it could not afford to finish the fixed-price contracts for the two projects, which add to a long list of abandoned U.S. nuclear projects.
SCANA said the project was prohibitively expensive, even with $2.168 billion that Toshiba Corp of Japan, Westinghouse's parent company, agreed last week to pay for its guarantee on the Westinghouse contract.
It said work would cease immediately and the thousands of staff on site would shift to winding down operations and securing the property.
Shares of SCANA were up 2.8 percent on Monday after the announcement. The stock is down about 14 percent this year.
SCANA and Santee Cooper may have to defend against attempts to claw back some of the rate increases used to finance the abandoned reactors.
SCE&G has implemented nine rate increases to customers to pay for V.C. Summer plant. Santee Cooper rate payers have had five rate increases and two more are pending approval.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Bernadette Baum and Diane Craft)
