Who pays for failed reactors?

August 1, 2017

Investigative Reports

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Spoiler alert: probably you

By ROBERT MEYEROWITZ

Last week, as the planned construction of two nuclear reactors in South Carolina was enveloped in doubt following the bankruptcy of their contractor, Westinghouse, news came of another planned rate-hike by one of the project’s two partners, the government-owned utility Santee Cooper.

Under the proposal, the Santee Cooper board would vote in December to raise rates for its residential electricity customers by about 10 percent over two years, in part to cover “costs associated with nuclear construction.” And with the hike, South Carolina would be poised to have the highest electricity costs in the country.

That was before the announcement yesterday that Santee Cooper and its partner in the reactors, SCE&G, would abandon the project.

Afterward, Santee Cooper Corporate Communications Manager Mollie Gore, asked if the proposed rate hike would be affected, said, via email, “The current rate proceeding addresses expenses we have already made.”

In other words, as Gore confirmed, Santee Cooper will continue to seek to recover the costs of the project, which are now the losses.

The decision to abandon the project came hard on the heels of a $2.2 billion payment offered to the partners by Westinghouse Parent Toshiba.

“We are committed to using the Toshiba settlement and any other resources we can collect through bankruptcy proceedings or elsewhere to offset costs to customers,” Gore said.

However, notes the Post & Courier‘s Andrew Brown today, “customers may have to pay for the steel and concrete that has already been sunk into the ground near Jenkinsville… In the case of Santee Cooper, they only have their customers to turn to when they need to pay a bill. They spent more than $4 billion in bond revenue on the project and somebody has to pay.”

Nerve stories are always free to reprint and repost. We only ask that you credit The Nerve.
  • Boss

    Another multi-billion dollar fail in SC.

    Maybe we should look at new leadership?

    • andnowyoudont

      Re-elect Nobody!! No Votes for Turncoats… I’m just sayin’.

  • Philip Branton

    This is just like the DoD spending millions on plasma waste to energy converters installed in Iraq and Afghanistan and never even turned them on. They used the burnpits instead that poisoned our troops. I wonder who did the due diligence of the Westinghouse prime contracts and subcontractors before this project was ever started. Who did the ongoing contractor due diligence reporting to the Board of SCANA and Santee Cooper and where are those records..?
    This is what happens when ethical actions and work results in South Carolina having the lowest electric rates in the nation. Someone sees a huge short in the ratepayer market and makes their play. Think of this scene from the Big Short as a play on the Westinghouse stock or pension liabilities that results in a bankruptcy….
    https://youtu.be/xbiDrzTd8fE

    If you are an oil or coal or gas commodity trader…… How would you politically set up the blowback to legally invest on the play..? Someone is making bank on the SCANA stock appreciation…. https://uploads.disquscdn.com/images/d5ab4934c3d84d4b559ea67540c60c9b7c3d2d2d12a726ef7847221cfbb52a13.jpg

  • Rex O’Steen

    We can’t pay without limits. Costs need to be evaluated and if fraud is involved, management should be fined at the least. Last year’s CEO of the Southern Company in Georgia, which has a similar two-reactor fiasco, made over 15 million. Does that amount include deferred compensation in the form of stock options? Whatever happened to sufficient, competent, process audits during construction?

  • cnb

    Criminal

  • Ms. E Smith

    It seems like the cost of failed energy choices should come from their ‘profits’, not from the consumers….and really, the energy choice for the future needs to be renewable, it’s the only energy source that actually DOES have a payback!

  • John Bryan

    Who pays? Here’s a hint. What rolls downhill?

  • C-Ann-C

    Wish we were still with Horry Electric Cooperative, that’s what it is, a “cooperative” , customers are all part stock holders in the company, they get to vote on rate hikes, new board members, get incentives for going to annual meetings, & their electric was very good while we were with them. Unfortunately we moved to an area where Santee Cooper takes over. If Horry Electric could expand to our new location, we’d switch to them.

  • Brit

    Ok I guess I’m missing something. When big construction jobs don’t the Contractors have to post bonds just for cases like this one. Failure to complete.

  • cb

    Two things should be done immediately:

    ) Customer bills should be reduced by the amount of the previous increases
    ) Put a plan in place to repay customers amount they have already paid in

    Somebody needs to look out for these customers.

  • Lyn Wilson

    If state regulators find the utility failed to, as law says, “anticipate or avoid the allegedly imprudent costs” based on the information available at the time, then, by law, SCE&G can be forced to foot the bill for this travesty. That should be the easiest litigation ever.

  • Philip Branton

    What no one is mentioning is the national security aspect of this fiasco with respect to regional energy stability and grid balance……..

    The NSA should be all over this……. https://uploads.disquscdn.com/images/fc60c8d3f3293aca49f3ff90b1da2f4712b204bee68e1c9c66b35ae7f06799d6.png

  • Pingback: So your reactors are kaput. Now what? « SC News Exchange()

  • Roger

    The attorneys are checking the law in the books to formulate a class action lawsuit as we speak.

  • Karl

    If you want to blame somebody there is two places you can go. One is the Governors mansion and the other is our Statehouse.

  • cnb

    What about the Fiduciary Responsibility of the people that made these terrible decisions?

  • johnperna

    Only government suggests giving a raise to workers for doing a bad job.