Delays for SC nuclear plant pressure industry

Staff Writer
Columbus CEO

ATLANTA (AP) — Expensive delays are piling up for the companies building new nuclear power plants, raising fresh questions about whether they can control the construction costs that crippled the industry years ago.

The latest announcement came this week from executives at SCANA Corp., which has been warned by its builders the startup of the first of two new reactors in South Carolina could be delayed two years or more. SCANA Corp. and plant co-owner Santee Cooper have not accepted that timeline from the companies designing and building the reactors, nor have they accepted responsibility for additional costs.

That announcement may well foreshadow more delays for a sister project in eastern Georgia, and they have caught the attention of regulators and Wall Street.

"Delays generally cause cost increases, and the question becomes who's going to bear the costs?" said C. Dukes Scott, executive director of the South Carolina Office of Regulatory Staff, a watchdog agency that monitors SCANA Corp.'s spending.

None of this is helpful for the nuclear power industry, which had hoped its newest generation of plants in Georgia and South Carolina would prove it could build without the delays and cost overruns so endemic years ago. When construction slows down, it costs more money to employ the thousands of workers needed to build a nuclear plant. Meanwhile, interest charges add up on the money borrowed to finance construction.

A single day of delay in Georgia could cost $2 million, according to an analysis by utility regulators.

Utility consumers often end up paying for these extra charges in the form of pricier electricity bills, unless the government intervenes and forces shareholders to absorb all or some of the losses. Despite previous delays and problems, regulators in both states have previously said finishing the nuclear plants is cheaper than stopping and building gas-fired power plants.

"People take it seriously because really the operative word is uncertainty," said Paul Patterson, an analyst for Glenrock Associates. "This is a large and complicated project and any significant delay has the potential to raise expenses."

Originally, the first of SCANA Corp.'s two new reactors was supposed to start commercial operation in April 2016. The company later moved that target startup date to early 2017.

SCANA Corp. senior vice president Stephen Byrne said contractors now say that date could stretch to late 2018, if steps are taken to speed up construction. Without speeding up work, the first plant would be finished during the first half of 2019. The second of its new reactors would come online one year later.

So far, the consortium building and designing the plant — Westinghouse Electric Co. and Chicago Bridge & Iron — have not told SCANA Corp. how much the schedule change might cost.

"My general experience with contractors though is the first number they hit you with has a lot of shock value in it, and you end up negotiating something more reasonable from there," Byrne said.

Meanwhile, Southern Co. subsidiary Georgia Power and its co-owners are building two of the same reactors at Plant Vogtle. Historically, construction schedules in Georgia and South Carolina move roughly in tandem because they are building the same reactors, rely on the same contractors and get their parts from the same suppliers.

Georgia Power has not been notified of any additional delays, company spokesman Brian Green said. Its first new reactor was supposed to start operating in April 2016, with the second starting a year later. Delays have already pushed those dates to late 2017 and late 2018.

Additional delays could prove unwelcome news for two pro-nuclear Republicans seeking re-election in November to Georgia's Public Service Commission, H. Doug Everett and Lauren "Bubba" McDonald.

Georgia Power is scheduled to update regulators on its progress later this month. The company was still waiting for an updated construction schedule from its contractors since the current version has little detail about important activities past December 2015.


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