SCE&G, Santee Cooper abandon construction of billion dollar nuke reactors

COLUMBIA, SC (WIS/AP) - Officials at both utilities that invested in two new nuclear power plants in South Carolina say they are stopping construction of the multibillion-dollar project, which has been caught up in the bankruptcy of its contractor.

South Carolina Electric & Gas announced Monday that it also plans to abandon the reactors under construction at the V.C. Summer Nuclear Station north of Columbia.

The decision came after the board of state-owned utility Santee Cooper voted Monday to halt construction. The reactors were set to be among the first new nuclear reactors built in the U.S. in decades, but the vote by Santee Cooper's board on Monday likely ends their future.

Santee Cooper chairman Lonnie Carter says it's a sad day for the country and a big setback for nuclear power generation.

"If the federal government wants there to be a nuclear energy sector in this country," Carter said, "then they need to step forward and make sure these projects are finished. Because if they don't we won't have one. Because as time goes on units will retire and we'll have less and less new nuclear energy in this country."

Santee Cooper owns 45 percent of the project. South Carolina Electric & Gas owns 55 percent. That utility planned to update state regulators on Tuesday.

The project has been shrouded in doubt since earlier this year when primary contractor Westinghouse filed for bankruptcy protection.

"Many of our employees have worked extremely hard over the years to build these new units. That's one of the factors that makes this decision particularly difficult. We are deeply grateful for all their contributions and will do our best to support those affected by these changes. We also recognize the impact that our path forward will have on customers, communities, shareholders, and the nuclear industry as a whole," SCE&G said in a statement." Our belief in the benefits of a nuclear generation, not just for the state, but for the nation, hasn't changed. As we have been doing for more than 30 years, we will continue providing customers with a valuable low-cost, non-emitting source of generation through our operating nuclear unit at V.C. Summer."

The utilities announced last week that Westinghouse's parent company, Toshiba Corp., agreed to jointly pay them $2.2 billion regardless of whether the reactors are ever completed.

The reactors were planned for the V.C. Summer Nuclear Station north of Columbia.

SEE IMAGES OF THE CONSTRUCTION HERE.

Santee Cooper says the decision is expected to save customers nearly $7 billion in additional costs to complete the project. The company says it has spent about $4.7 billion in construction and interest so far on the project.

"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," said Lonnie Carter, Santee Cooper president and CEO. "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."

Santee Cooper says an analysis shows the project would not have been completed until 2024 and would end up costing customers a total of $11.4 billion.

"Santee Cooper will continue to pursue Westinghouse assets and other revenues and assets, through bankruptcy court and other legal channels, to further offset costs," Carter said.

Santee Cooper's largest customer, the Electric Cooperatives of South Carolina, said it supported the decision.

"It's the right decision at the right time," said Michael N. Couick, president, and CEO of the state association of electric cooperatives. "But it was also the right decision to start construction of the nuclear generators in the 2007-2008 time period, contrary to many critics with convenient 20/20 hindsight."

Copyright 2017 The Associated Press and WIS.