MONCKS CORNER, SC (WCSC) - Santee Cooper will suspend construction at the V.C. Summer Nuclear Station in Fairfield County.
The utility's board of directors approved plans to suspend construction of Units 2 and 3 at the Jenkinsville site, a move they say will save Santee Cooper customers nearly $7 billion in additional costs.
Santee Cooper has spent approximately $4.7 billion in construction and interest to date for its 45 percent share of the new nuclear power project, according to Santee Cooper spokesperson Mollie Gore.
The decision to suspend construction is based in large part on a comprehensive analysis of detailed schedule and cost data, from both project contractor Westinghouse Electric Co. and subcontractor Fluor Corp., first revealed after Westinghouse, filed for bankruptcy in March. 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, Gore said.
"Generation diversity remains an important strategy for Santee Cooper, but the costs of these units are simply too much for our customers to bear," Santee Cooper Board Chairman Leighton Lord said. "Even considering these project challenges, Santee Cooper is proud of our role in this initial effort to restart a 30-years-dormant industry. Nuclear power needs to remain part of the U.S. energy mix."
The most recent analysis, anticipating the rejection of the contract by Westinghouse in bankruptcy proceedings, shows the final cost for Santee Cooper to complete the project would be $8.0 billion for construction and approximately $3.4 billion for interest, Gore said.
The schedule delays increased the projected interest costs 143 percent over the original plan.
"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," Santee Cooper President and CEO Lonnie Carter said. "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."
Toshiba Corp., the parent of Westinghouse, contractually agreed to pay Santee Cooper $976 million in settlement beginning later this year and continuing through 2022.
Carter said Santee Cooper will use these funds to avoid new debt and stabilize rates, to directly benefit customers.
"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 says since it and SCE&G filed the application to build the additional units in 2008, the business client has changed considerably.
"In choosing Westinghouse, Santee Cooper and SCE&G chose a company with a worldwide reputation as the clear leader in nuclear design and engineering. Unfortunately, Westinghouse failed to live up to its reputation and perform," Carter said.
Santee Cooper is the state's largest power provider and largest green power generator. It serves two million people across the state.