Duke Pulls Plug on Nuclear Plant; Cancellation Is Latest Blow to Sector

By Russell Gold Features Dow Jones Newswires

Duke Energy Corp. said Friday that it was abandoning plans to develop a nuclear power plant in South Carolina, in the latest blow to the U.S. nuclear industry.

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The company had planned to build two reactors designed by Westinghouse Electric Co. Westinghouse's bankruptcy earlier this year led Duke to reconsider moving ahead.

"The risks and uncertainties to initiating construction on the Lee Nuclear project have become too great, and cancellation of the project is the best option for customers," Duke spokesman Neil Nissan said.

Construction on the William States Lee III Nuclear Generating Station hadn't begun yet. Duke said it plans to file a petition with the North Carolina Utilities Commission to abandon the project. It was to be located near Gaffney, S.C., and provide power for customers in both North Carolina and South Carolina.

Duke said it had spent $542 million on the project to date, mostly on securing a license from the federal government, engineering and site acquisition. The company said it would file with state regulators to pass these costs on to electricity customers.

The decision to pull the plug was driven in part by large cost overruns to build other Westinghouse AP1000 nuclear reactors. Late last month, Scana Corp. decided to abandon work on a half-built AP1000 as costs swelled from $14 billion to a projected $25.7 billion. Southern Co. is struggling with rising costs at a half-built nuclear power plant in Georgia.

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Duke said its decision was partly driven by the cost increases and time delays at the Scana project. It will maintain the site and take "minimal steps" needed to keep the federal license.

The decision to stop work at the Lee facility was cheered by critics who worry that building a nuclear power plant is too costly and unpredictable.

"This is absolutely the right decision. The issues in South Carolina should make new nuclear reactors radioactive, particular Westinghouse new nuclear reactors," says Stephen Smith, executive director of the Southern Alliance for Clean Energy. "It is a bad deal for consumers and it's a bad risk for utilities and utility shareholders."

Write to Russell Gold at russell.gold@wsj.com

(END) Dow Jones Newswires

August 25, 2017 13:43 ET (17:43 GMT)