Santee Cooper and South Carolina Electric & Gas close down two nuclear power projects after spending $5 billion.


Mark Allen

Aug 01, 2017


Santee

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Hipstercode.com generally focuses its attention on software matters but on a slow software news day we sometimes look to technology news and this one is a big one. Santee Cooper and South Carolina Electric & Gas announced that it was bringing an end to two nuclear power plants that it was building in the state. Santee Cooper is a private company that is owned by the State of South Carolina and South Carolina Electric and Gas is a publicly utility company traded on the NYSE. The projects have been in a state of limbo since March 2017 when Westinghouse, now a division of Toshiba, filed for bankruptcy protection.


Westinghouse had been the prime contractor on these projects. Westinghouse's parent company, Toshiba, announced the other day that it was only going to contribute another $2.2 billion regardless of whether the reactors were completed or not. This move led to the Santee Cooper decision to scrap the projects even though Santee had already invested $5 billion for its 45% ownership stake in the two plants. Santee Cooper estimates that by closing the project it would be able to save $7 billion dollars in future rate hikes to its customers, as well as, a further $8 billion dollars, plus $3.7 billion dollars in interest payments, that would be needed from Santee's 45% ownership stake to complete the two plants. 


The truth is more likely related to the market. Fossil fuels are so much cheaper today than when the projects were originally planned. Lower fuel costs are also expected to continue for at least the next five years. These two new reactors that would been built, would have been the first new plants in the United States in over 20 years. Santee Cooper CEO Lonnie Carter said in a released statement that "I’m disappointed today, not just for Santee Cooper and its customers, but for our country and the industry as a whole. If you really believe we need to reduce carbon, this was the way to do it.” The loss of these two projects may also force Santee Cooper to reopen a coal-fired unit idled earlier this year.




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