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Company wants customers to pay more in advance for building nuclear project

“The amount that SCE&G customers are unjustly forced to pay in advance for the nuclear project has become a significant burden”

“That SCE&G customers are now paying over 16 percent of the bill for a project that may face more delays and cost overruns should cause alarm about skyrocketing rates, rates that are certain to go even higher due to the nuclear project.”

hungry-nukes 1SCE&G asking for $852 million more to finish Summer nuclear plants BY RODDIE BURRIS rburris@thestate.com The State, 13 June 16, COLUMBIA, SC 

The SCANA-owned utility also seeks a new fixed price contract option

Utility says future cost overruns would belong to construction contractor Westinghouse

S.C. public interest agency says price tag would not be “fixed”; likely to cost more

SCE&G is asking state regulators to approve an $852 million increase in the projected cost of building two nuclear reactors in Fairfield County, but the company says the potential for any other cost increases is limited.

Critics of the requested increase — which would be paid for by customers — call the request “stunning.” If the state Public Service Commission approves the higher cost, South Carolina Electric & Gas Co.’s 702,000 electric customers would likely face higher rates.

But SCE&G says its contract with the project’s new construction company essentially “fixes” the reactors’ cost in place. “The fixed-price option provides substantial value to our customers, investors and our company by limiting the risk of future cost increases,” said Eric Boomhower, SCE&G spokesman.

The S.C. Office of Regulatory Staff said Monday it is skeptical. The agency represents the public’s interest in utility regulation and must make a recommendation on SCE&G’s request to the S.C. Public Service Commission by Sept. 1……

“(This proposal’s) got some aspects of a fixed price, but there’s stuff in there that’s not fixed and we are going through that now.”

The latest proposed increase follows the company’s decision in October to replace the construction project’s contractor with Westinghouse Electric Co. After a review of the project, Westinghouse and SCE&G agreed on the new contract with the higher projected cost. The project’s new total cost would be $14 billion, about 43 percent higher than the $9.8 billion price tag announced in 2008.

SCANA, parent company of SCE&G, and Santee Cooper, the state-owned utility, have partnered to build Reactors 2 and 3 at the V.C. Summer plant in Jenkinsville. SCANA owns 55 percent of the project.

The 2005 Energy Policy Act provides a production tax credit for electricity produced by new nuclear power plants. But to qualify for the nuclear production tax credit, a new nuclear power plant must be in service by Dec. 31, 2020.

The Unit 2 and Unit 3 reactors under construction at the Summer plant are eligible for the tax credits. But construction delays, which also drive cost overruns, have plagued progress and some are concerned about the project qualifying for the tax credits…….

Within 30 days, SCE&G will outline an electric rate increase request to the PSC under the state’s Base Load Review Act, which allows utilities to collect construction finance costs on nuclear construction projects prior to completion of the plants. SCE&G said the practice saves ratepayers additional costs later on……

critics aren’t happy. “The amount that SCE&G customers are unjustly forced to pay in advance for the nuclear project has become a significant burden, as revealed by” Scott’s office, said Tom Clements, director of Savannah River Site Watch, a watchdog group.

“That SCE&G customers are now paying over 16 percent of the bill for a project that may face more delays and cost overruns should cause alarm about skyrocketing rates, rates that are certain to go even higher due to the nuclear project.” http://www.thestate.com/news/business/article83609292.html

June 15, 2016 - Posted by | business and costs, USA

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