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Bond sale for nuclear construction as its costs soar

Santee Cooper greenlights $831M bond sale to fund nuclear construction, Utility Dive By  | July 5, 2016 

Dive Brief:

  • The Santee Cooper Board of Directors has taken steps to lock in the cost of developing two new units at the V.C. Summer Nuclear Station by taking a fixed price option as part of an amended Engineering, Procurement and Construction Agreement.
  • The board also approved the sale of $831 million in revenue obligation bonds, primarily to fund nuclear deveopment but with a portion going to refinance existing utility debt.
  • Under the fixed price option, Santee Cooper’s cost of the facility’s costs will total $6.2 billion, 20% more than the utility estimated in 2012, the Post and Courier noted. Santee Cooper is developing the plant alongside South Carolina Electric & Gas Co. ……

The decision follows revelations that development costs at the facility are rising. SCE&G last month informed state regulators that its share of the development of two new nuclear units had increased significantly, rising about $852 million to reach $7.7 billion, with the total price tag coming in at around $14 billion. SCE&G attributed the ballooning costs to its choice of a fixed price option to construct reactors.

Santee Cooper owns 45% of the nuclear expansion project, and SCE&G owns 55%. In the fall, the the two utilities negotiated an amended EPC agreement with Westinghouse Electric Co. LLC, which Santee Cooper said including terms to incentivize schedule adherence and shift financial risk to Westinghouse for any additional delays in the current scope of work……..http://www.utilitydive.com/news/santee-cooper-greenlights-831m-bond-sale-to-fund-nuclear-construction/422007/

July 6, 2016 - Posted by | business and costs, USA

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