BRADENTON, Fla. – The South Carolina Public Service Authority advised bondholders Monday that it plans to stop working on the two nuclear reactors under construction at the V.C. Summer Nuclear Station.
Halting the work is expected to save customers nearly $7 billion in additional costs that otherwise would have been needed to complete the project, the state-run agency, also known as Santee Cooper, said in a notice on the Municipal Securities Rulemaking Board’s EMMA filing system.
The SCPSA has issued $4.2 billion of bonds to finance its 45% ownership share of the project, which will continue to be paid, according to spokeswoman Mollie Gore.
“Obviously, we’re prepared to pay our bond obligations,” Gore said.
Santee Cooper’s Board of Directors voted Monday to wind-down and suspend construction on the two units as well as for management to preserve the site and related components and equipment.
SCANA Corp.’s South Carolina Electric & Gas Company, a 55% owner, took similar action and said it will file a petition with the South Carolina PSC seeking approval of a plan to abandon 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% more than originally planned,” said Santee Cooper president Lonnie Carter. “We simply cannot ask our customers to pay for a project that has become uneconomical.”
Carter also said the agency is disappointed that the prime contractor, Westinghouse Electric Co., “failed to meet its obligations and put Santee Cooper and our customers in this situation.”
On Thursday, SCE&G and Santee Cooper announced a settlement agreement under which Toshiba Corp. would provide a $2.17 billion guarantee on the V.C. Summer nuclear units that Westinghouse had contracted to build prior to filing a Chapter 11 petition on March 29.
The settlement provides $976 million to Santee Cooper. Payments will begin later this year and continue through 2022.
“Santee Cooper will use these funds to avoid new debt and stabilize rates, to directly benefit customers,” Carter said, adding that the public power agency will continue to pursue revenues and assets of Westinghouse through bankruptcy court and other legal channels, to further offset costs.
Environmental groups, which had filed a complaint with the SCPSC, hailed the decision to end what it called a “bungled” project.
“We applaud Santee Cooper and SCE&G for making the right decision to protect their customers,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy. “This project has been a multi-billion dollar disaster.”
SCE&G is scheduled to give the PSC an update on the project Tuesday.
Santee Cooper, South Carolina’s largest power provider, said its decision to suspend construction was based largely on a comprehensive analysis of schedule and cost data provided by Westinghouse and subcontractor Fluor Corp.
The analysis showed the project would not be finished until 2024, four years after the most recent completion date provided by Westinghouse, and would end up costing Santee Cooper customers a total of $11.4 billion.
Approximately $4.7 billion has been spent by Santee Cooper to date.
SACE also said Georgia Power Co. and its public partners such as the Municipal Electric Authority of Georgia should end work on the “risky” nuclear reactors under construction at Plant Vogtle, which were being built by Westinghouse.
A decision on whether to continue that work has not been made.
