SCE&G to Cease New V.C. Summer Nuclear Project

On July 31, 2017, South Carolina Electric & Gas Company (SCE&G) announced that it would cease construction of two new nuclear reactors at the V.C. Summer Nuclear Station in Jenkinsville, South Carolina.  SCE&G, which is a principal subsidiary of SCANA Corporation (SCANA), further announced that the company intends to promptly file a petition with the Public Service Commission of South Carolina seeking approval of its abandonment plan.

According to the company’s press release, this decision was reached by SCE&G after considering the additional costs to complete the new nuclear reactors, the uncertainty regarding the availability of production tax credits for the project and the amount of anticipated guaranty settlement payments from Toshiba Corporation (Toshiba).  SCE&G’s decision was also influenced by other matters associated with continuing construction including the decision of the co-owner of the project, the South Carolina Public Service Authority (Santee Cooper), the state owned electric utility, to suspend construction of the project.

Based on these factors, SCE&G concluded that it would not be in the best interest of its customers and other stakeholders to continue construction of the project.

Overview and Analysis  Following the bankruptcy filing of Westinghouse Electric Company, LLC (WEC), SCE&G and Santee Cooper each began a comprehensive process of evaluating the most prudent path forward for the new nuclear reactors.  The project owners worked with WEC and Fluor Corporation, as well as other technical and industry experts, to evaluate the project costs and schedules.

Based on this evaluation and analysis, SCE&G concluded that completion of both new nuclear reactors would be prohibitively expensive.  According to SCE&G’s analysis, the additional cost to complete both reactors beyond the amounts payable in connection with the engineering, procurement, and construction contract would materially exceed prior WEC estimates, as well as the anticipated guaranty settlement payments from Toshiba.  Moreover, in order to qualify for production tax credits under current tax rules, the new reactors would need to be online before January 1, 2021.  SCE&G’s analysis concluded that the new reactors could not be brought online until after this date.

SCE&G also considered the feasibility of completing the construction of Unit 2 and abandoning Unit 3 under the existing ownership structure and using natural gas generation to fulfill any remaining generation needs.  This option provided a potentially achievable path forward that may have delivered SCE&G a similar megawatt capacity as its 55% interest in the two reactors and provided a long-term hedge against carbon legislation/regulation and against gas price volatility.  SCE&G had not reached a final decision regarding this alternative when Santee Cooper determined that it would be unwilling to proceed with continued construction.  Consequently, SCE&G determined that it is not in the best interest of customers and other stakeholders for it to continue construction of one reactor.

Based on the evaluation and analysis, and Santee Cooper’s decision, SCE&G has concluded that the only remaining prudent course of action will be to abandon the construction of both Unit 2 and Unit 3 under the terms of the Base Load Review Act (BLRA).  Accordingly, normal construction activities at the site will cease immediately and efforts will be shifted toward an orderly transition of winding down and securing the project property.  SCE&G plans to use the anticipated payments resulting from the settlement of Toshiba’s guaranty to mitigate cost impacts to SCE&G electric customers.

Abandonment Proceeding  On August 1, 2017, SCE&G will fully brief the Public Service Commission of South Carolina and thereafter initiate the abandonment proceeding.  In accordance with the BLRA, SCE&G intends to seek an amortization of the project costs and a return at the weighted average cost of capital on the unamortized balance until fully recovered. SCE&G plans to use the anticipated proceeds from the Toshiba settlement and benefits derived from tax deductions to mitigate rate increases and lessen the impact on its customers for several years.

Background  SCANA Corporation—which is headquartered in Cayce, South Carolina—is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. The Company serves approximately 718,000 electric customers in South Carolina and approximately 1.3 million natural gas customers in South Carolina, North Carolina and Georgia.

SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 718,000 customers in South Carolina.  The company also provides natural gas service to approximately 362,000 customers throughout the state.

Additional information about SCANA and its businesses is available on the Company’s website at www.scana.com.  Additional information about SCE&G is available at www.sceg.com.

Southeast Compact Commission Elects New Officers

On June 23, 2016, the Southeast Compact Commission for Low-level Radioactive Waste Management elected the following new officers at its 108th Business Meeting in Atlanta, Georgia.

  •   Debra Shults:  The Commission elected Debra Shults as Chair, which duties will include presiding at all Commission meetings, appointing the membership of all committees of the Commission, officially representing the Commission, and performing all other duties that are normally performed by a presiding officer.  Shults has served as an Alternate Commissioner from the State of Tennessee since 1989 and as the Commission’s Vice-Chair since 2004.  She has over thirty years of professional experience in managing environmental programs in the state.  In 2010, Shultz was appointed as the Director of the Division of Radiological Health (DRH)) in the Department of Environment and Conservation (TDEC).  She serves as the Governor’s appointed State Liaison Officer to the U.S. Nuclear Regulatory Commission (NRC); the designee to receive advance notifications regarding shipments of certain radioactive materials per 10 CFR 37; and, as Treasurer of the Organization of Agreement States (OAS).
  •   Steve Harrison:  The Commission elected Steve Harrison as Chair-Elect.  His duties will include representing the Commission on behalf of the Chair when needed; preparing to assume the position of Chair to assure continuity in the leadership of the Commission; and, assumption of the position of Chair if the current Chair is unable to perform her duties.  As Chair-Elect, Harrison will serve as the Vice-Chair and will automatically become the Chair after serving a two-year term as Chair-Elect.  Harrison has served as one of the two Commissioners from the Commonwealth of Virginia since 2014.  He has served as the Director of the Commonwealth’s Office of Radiological Health in the Virginia Department of Health (VDH) since 2012.  Harrison joined VDH in 2003 where he has served as Assistant State Planning Coordinator, State Hospital Coordinator, Strategic National Stockpile and Exercise Coordinator, and Emergency Preparedness & Response’s Central Region Planner.  Prior to joining VDH, Harrison worked for Dominion Resources for 23 years, where he performed nuclear emergency planning and conducted radiological surveillance and testing.
  •   Paul Burks:  The Commission elected Paul Burks as Secretary/Treasurer, which duties will include supervising and controlling the funds of the Commission and ensuring that the minutes of all Commission meetings are recorded, prepared, and distributed to each member of the Commission.  Burks has represented the State of Georgia since 1984.  He has served on various committees of the Commission and as Chair of the Administrative Committee.  After serving nearly 31 years in Georgia state government, Burks retired in 2006 as the Executive Director of the Georgia Environmental Facilities Authority (GEFA).  Since 2008, he has worked on a consulting and part-time basis for the Carl Vinson Institute of Government of the University of Georgia.  He currently serves as State Services Liaison for the Institute.

The Southeast Compact for Low-Level Radioactive Waste Management is an agreement among six states—Alabama, Florida, Georgia, Mississippi, Tennessee, and Virginia—to provide for the responsible management of the region’s low-level radioactive waste.  The Southeast Compact Commission oversees administration of the Compact.

For additional information, please contact Ted Buckner, Executive Director of the Southeast Compact Commission for Low-Level Radioactive Waste Management, at (919) 380-7780 or at tedb@secompact.org or go to the Southeast Compact Commission’s web site at www.secompact.org.