Troubled by nuclear issues
Article was added on Friday, September 01, 2017
The reaction has been strong and widespread following last
month's decision to stop construction on two South Carolina nuclear
units. Your board of trustees and I are troubled by the situation,
too, so I wanted to provide our perspective on this
SCE&G and Santee Cooper, owners of the V.C. Summer Nuclear
Generating Station in Fairfield County, stopped construction on two
new units on July 31. The project was over budget and behind
schedule, and costs continued to grow. The main contractor,
Westinghouse Electric Co., had filed for bankruptcy in March, and
its parent company, Toshiba Corp., was also financially challenged.
Completing the project for a previously agreed fixed price of $13.9
billion was highly unlikely.
The power aggregator for your cooperative and the 19 others
across the state, Central Electric Power Cooperative, did its own
deep dive into the money and work site problems and concluded that
the owners' decision to stop was the right choice. It just didn't
make sense to continue in the existing framework of owners, costs
and schedules. Nobody's happy about this situation. Billions of
dollars seem wasted, and we have no new power generators to show
Electric cooperatives are not owners of the nuclear plant. These
independent, member-owned utilities serving in all 46 counties are,
as a group, Santee Cooper's largest customer, and it is one of our
biggest suppliers. We have long-term contracts with our power
suppliers, a common and necessary practice in the electricity
business, so expenditures by Santee Cooper impact us.
We understand and share the concern expressed by regulators,
legislators, the governor and consumers. When frustrated SCE&G
customers say stockholders, not ratepayers, should pay for the
project's failure, we know that our stockholders-our owners-are
also our consumer-members. That's why your board of trustees and I
are especially troubled by these events.
We will support any appropriate inquiry or investigation into
how decisions were made and whether they were prudent. To the
extent that we can have an impact on the next steps in this
difficult situation, we will work aggressively for the best
interests of our members.
A final note: The cost and schedule overruns and the project's
failure have caused some people to wonder why the owners would have
begun building nuclear generators in the first place. I want to
recommend an article that provides an insightful explanation of how
federal energy policy drives decisions in the electricity business.
You can read it online at http://bit.ly/2vjWMyx.
Robert G. Ardis III
President and Chief Executive Officer
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