Utility customers in South Carolina may end up spending the next 60 years paying billions for two nuclear reactors that will never get built, based on a proposal that Scana Corp. filed with regulators Tuesday.
On Wednesday, workers fired by the abandonment of the project packed the Statehouse as legislators pledged to overhaul the utility review process that allowed the multibillion-dollar debacle.
The “catastrophic” end of the project at V.C. Summer Nuclear Station shows the current regulatory process doesn’t adequately protect residents or the state as a whole, said Rep. James Smith, a Columbia Democrat. “You deserve better,” he told the crowd.
Smith is part of a new, bipartisan Energy Caucus he pledged would “ask the tough questions and understand how this thing got so far off the rails.”
Scana is seeking state approval to collect $4.9 billion from customers to cover the costs of scrapping two half-finished reactors after construction delays and billions in cost overruns forced the utility owner to pull the plug. Scana is proposing to recover abandonment expenses through customer rates over six decades. Going through with the project would have ultimately cost more than $20 billion, based on company forecasts.
Scana’s estimates land the project a place among the costliest nuclear power plants that failed to be built in the U.S., underscoring the ballooning price that consumers have paid for a long-hyped nuclear renaissance that has yet to materialize. Duke Energy Corp., Dominion Resources Inc. and NextEra Energy Inc. are among the utilities that have been cleared by regulators to charge at least $1.7 billion for reactors that exist only on paper, filings analyzed by Bloomberg last August show.
A 60-year recovery period will at least “minimize the near-term rate impact” to South Carolina customers, said Paul Patterson, an analyst for Glenrock Associates.
Scana said that a tax deduction could reduce the impact on ratepayers. The utility also said in its filing that “mitigating adjustments” such as guaranteed payments from Toshiba — the parent of the project’s now-bankrupt contractor Westinghouse Electric Co. — will mean customers won’t see cost increases “for a number of years.”
According to Scana’s filing, the South Carolina Public Service Commission had originally approved a forecast capital cost for the project of $6.3 billion. The utility estimated in a recent review that the reactors would cost about $8.8 billion to complete. The economics of such nuclear projects have meanwhile been undermined by low natural gas prices and the onslaught of cheap, renewable power.
The Associated Press contributed to this report.