Now that the South Carolina Electric & Gas (SCE&G) project to build two new nuclear power reactors at the VC Summers power plant in S.C. has been officially canceled, there is a big mess that has to be dealt with. Lawsuits are springing up between different players in the project. One big question that must be answered is who is going to pay the nine billion dollar bill for work already done?
The Office of Regulatory Staff (ORS) in S.C. is the watchdog agency for utilities in S.C. Last Wednesday, the ORS recommended that the monthly customer charges for the cancelled project be removed from utility bills. The ORS also wants to “claw back” the one billion eight hundred million dollars that customers of SCE&G have already paid. The ORS pointed out that SCE&G did not share the results of a 2016 audit that detailed major problems at the at the construction site. Their recommendation was also supported by a recent legal opinion from the S.C. Attorney General’s office. The opinion raised questions about the legitimacy of a 2007 law that allowed utilities to pass along charges for the construction of a nuclear power reactor before it was completed and operating.
The next day after the ORS made its recommendation that customer payments be halted, the seven members of the state Public Utility Commission met to discuss what action should be taken with respect to customer payments for the failed project. It took the Commission less than ten minutes of discussion to conclude that it was time for the Commission to schedule hearings on the subject of customer payments. This dispute will most likely launch a legal battle between the utility and the state regulators to determine who has to pay the nine billion dollars.
SCE&G responded to the recommendation from the ORS by saying that any attempted to stop customer payments would be “illegal and unconstitutional.” SCE&G says that if payments from customers are halted, the company will no longer be able to supply power to more than seven hundred thousand current customers in South Carolina. SCE&G told state officials that it would continue the monthly changes for the failed project. SCE&G also said that they would like to recover an additional two to four billion dollars from customers to fully cover the costs of the failed project.
If the state regulators cancel the customer payments for the project, the stock of SCE&G would drop even further than the ten dollars per share that it has already fallen. The recommendations of the ORS and the state investigation of the circumstances surrounding the cancellation of the construction of two new nuclear power reactors at VC Summer were responsible for the ten dollar drop.
Since the beginning of the use of nuclear power for electricity generation in the 1950s in the U.S., not one single nuclear power reactor construction project has been completed within budget and on schedule. In some cases, things have gotten so bad that projects have been cancelled before completion. The two new reactors for VC Summer were two of the four new reactor construction projects in the U.S. in decades. They were supposed to be part of a nuclear “renaissance” in the U.S. Instead, they might be the beginning of the end of nuclear power in the U.S.
