Nuclear Reactors 272 - Westinghouse Bankruptcy Calls Completion Of New Reactors At Summer Nuclear Generating Station Into Question
Financial problems at Toshiba and its nuclear subsidiary, Westinghouse continue to roil the nuclear industry. Westinghouse has just filed for Chapter 11 bankruptcy. Toshiba and Westinghouse say that only U.S. operations of Westinghouse will be affected by the bankruptcy filing.
South Carolina Electricity and Gas (SCE&G), a subsidiary of Scana Corporation, and Santee Cooper contracted Westinghouse to build two AP1000 nuclear power reactors at the Virgil C. Summer Nuclear Generating Station near Jenkinsville in Fairfield County, South Carolina. The Westinghouse U.S. bankruptcy filing has called the completion of the project at the Summer power plant into question.
The CEO of Scana said yesterday that Scana and Santee Cooper had reached an agreement with Westinghouse after the bankruptcy filing that allows for work on the two AP1000s at the Summer power plant to continue during a thirty days evaluation period. This will give Scana a chance to consider the best route forward for the project. The bankruptcy court will have to approve the thirty-day evaluation.
The first step in the evaluation is to have Westinghouse provide Scana with an estimate of how much it will cost to complete construction of the two reactors. This will be in addition to funds that have already been allocated for existing contracts. Scana expects to be compensated for the extra costs by Westinghouse and Toshiba. In addition to the issues of funding, there may also be a surety bond posted by Westinghouse as well as an arrangement where AP1000 intellectual property and software would be placed in escrow by Westinghouse.
There will be a variety of options to be considered by Scana during the thirty day evaluation period. 1) They may continue with the construction of both reactors. 2) They may focus on the completion of only one reactor and delay construction on the other reactor. 3) They may focus on the completion of only one reactor and abandon construction of the other reactor. 4) They may abandon construction of both of the reactors. If they decide to abandon the construction of one or both of the reactors, Scana will attempt to recover the money they have already spent under the provisions of South Carolina's Base Load Review Act.
The Scana CEO said that his company will carefully review and consider all options but that his personal preference would be for Scana and Santee Cooper to complete construction of both of the reactors. He said "We built these plants because we needed generation for our service territory. We were looking for a long-term clean energy solution, which these plants provide … If we just cancel these plants we still have a generation issue we need to face. Our commitment is still to try to finish these plants - that would be my preferred option before going through the evaluation. The least preferred option, realistically, is abandonment."
There are only a few nuclear power reactors being built in the U.S. after a long period with no new reactor construction. The nuclear industry is trying hard to come back from decades of decline in the U.S. but the bankruptcy of Westinghouse and the problems with completion of the new Summer power plant reactors will certainly make recovery of industry momentum more difficult.
Virgil C. Summer Nuclear Generating Station:
