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V.C. Summer Nuclear Station expansion might not be saved by Toshiba’s $2.2 billion in guarantees

Guarantee may not be enough to save troubled V.C. Summer nuclear project, Jul 27, 2017, John Downey,Charlotte Business Journal Toshiba Corp. has agreed to pay S.C. Electric & Gas and Santee Cooper almost $2.2 billion in guarantees for their spending on the V.C. Summer Nuclear Station expansion.

But that will not be enough to cover the expected increase in costs for completing the troubled project, the two utilities say. So while observers call the settlement encouraging, there are deepening questions about whether it will be economically feasible to finish the expansion.

That decision — which now appears to involve a more-than-$16-billion question — could come as early as next week…….

it is also clear that the costs to complete the project are going to be very high. The joint statements says “the additional cost to complete both units … will materially exceed prior (Westinghouse) estimates as well as the anticipated guarantee settlement payments from Toshiba.”

If the price is beyond the $14 billion estimate in 2015 and the $2.2 billion in the guarantees, it puts the total cost north of $16 billion.

In order for the companies to decide to complete the project, they will need to determine that it would cost more to abandon the project now and build an alternative power plant (or plants) to replace the electricity that would have been produced by Summer.

The joint statement also notes that the utilities stand to lose an important tax break — which makes a $2 billion difference in costs to customers —if the projects are not completed by Jan. 1, 2021.

“At this point, the project owners believe that the units could not be brought online until after this date,” the companies say…..https://www.bizjournals.com/charlotte/news/2017/07/27/toshiba-guaranty-may-not-be-enough-to-save-the.html

July 31, 2017 - Posted by Christina Macpherson | business and costs, USA