Utility unsure when it will re-file plans to bail on project

A South Carolina utility has no timeline for re-submitting its plans for bailing on a nuclear power project and recouping billions more from customers.

But nothing about its plans have changed, executives for South Carolina Electric & Gas told financial analysts in a teleconference Wednesday.

"This is temporary," Kevin Marsh, the CEO of parent company SCANA, said about Tuesday's voluntary withdrawal of its petition before state regulators. "We have not changed our decision with abandonment."

The move was solely to give lawmakers time to review the utility's move to abandon two partly built reactors at V.C. Summer Nuclear Station, he said.

SCE&G and state-owned utility Santee Cooper decided July 31 to halt construction on the project they've jointly spent $10 billion on, much of it paid by customers through rate hikes since 2009. The next day, SCE&G filed a request to recoup $5 billion over 60 years, with at least $2.2 billion of that coming from customers' bills.

A backlash from lawmakers and the public followed the project's abrupt end, which also left about 6,000 people jobless.

Separate House and Senate panels created to investigate the decisions start meeting next week.

"We want to give them time to complete their process," Marsh said of the legislative panels. "There will be a time in the future we'll need to re-file. We didn't draw any lines in the sand."

By law, the state Public Service Commission must approve the private utility's plans. The agency has no authority over state-owned Santee Cooper.

The utility had asked state regulators to rule quickly. Legislators have publicly warned the commissioners, whom they elect, not to do so. But, as filed, state law required a ruling by February or the petition would have been automatically approved. That left little time for the Legislature to act, as the session isn't slated to resume until January.

Some legislative leaders have called for a special session to at least force a pause in the process, but House Speaker Jay Lucas has resisted, saying legislators could end up causing more damage with rash action.

Gov. Henry McMaster has said he's talking with other utilities about the possibility of buying out Santee Cooper's 45 percent share of the project or even buying the state-owned utility outright as a way to complete at least one of the reactors. Santee Cooper CEO Lonnie Carter said last Friday there are no credible offers.

And Marsh reiterated Wednesday even having a "willing partner" wouldn't assure the project's renewal.

In the end, the decision still comes down to cost, he said.

Renewing construction would take at least a year, as SCE&G and the new utility would have to negotiate their own terms as well as new construction and engineering contracts. A restart, he said, rests on getting a federal grant — something the Trump administration has so far denied — and being able to collect $2 billion in federal tax credits — now unavailable because the delayed project won't meet a federal deadline for the plants being operational.

"Without governmental support, the cost is just too great," Marsh said, adding that the utility turned down a loan offered by the U.S. Department of Energy. "While loans are nice, they don't reduce the cost of the project."

A decision would also depend on what legislators do to the 2007 state law that prompted the project's start, he said.

Legislators say they want to overhaul or repeal the law they now consider a mistake, which gave utilities the ability to charge customers for reactors as they're being built and recoup money even if a project's never finished.

The project was already years behind schedule and billions over budget when lead contractor Westinghouse declared bankruptcy in March, voiding fixed-price contracts designed to limit costs to $14 billion. Utility executives said they were forced to give up after determining the price tag for completing the project, budgeted at $11 billion in 2008, had soared beyond $20 billion. The post-bankruptcy-analysis also concluded both reactors could not be operational until 2024.