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Another Vogtle debacle? Cost overruns, delays and construction woes bedevil V.C. Summer reactor project in S.C.

Six rate increases already imposed on S.C. consumers, project now eating up estimated 11 percent of utility bills

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COLUMBIA, S.C. - January 16, 2014 (www.investorideas.com newswire) The $1 billion cost overrun, lengthening project delays and construction problems at Southern Company's troubled Vogtle nuclear reactor project may get all the national headlines, but South Carolina Electric & Gas' V.C. Summer reactor project is now giving the well-publicized nuclear debacle in Georgia a run for its money. The growing list of problems at V.C. Summer include a half billion dollar cost overrun, pushed-back end dates for finishing the reactor and significant construction challenges, including with the reactor's critical shield building. The V.C. Summer and Vogtle projects are proceeding in parallel using the experimental Westinghouse AP1000 design.

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Tom Clements, Friends of the Earth's South Carolina-based nuclear campaigner, made the following statement about the project: "The mess at the Vogtle reactor gets all the headlines highlighting the failed nuclear renaissance, but the V.C. Summer reactor construction project is in every bit as much trouble. As construction becomes more complex and schedule delays mount, V.C. Summer is emerging as an epic mistake at least as big as Vogtle. We have already seen six pay-in-advance rate increases in the state attributed to the V.C. Summer project, and we estimate it already accounts for a whopping 11 percent of the total utility bill -- the charges in which are only for financing costs. State regulators refuse to require the nuclear utility to detail in monthly utility bills how much ratepayer money is being wasted on the nuclear project. We expect rates to skyrocket when capital costs start coming into the bill, which will place the utility in a precarious position with customers. The hidden rip-off of construction work in progress payments situation in South Carolina, which is the only reason the project is proceeding, is even worse than in Georgia."

On January 10 of this year, the South Carolina Office of Regulatory Staff quietly released its "Review of South Carolina Electric & Gas Company's 2013 3rd Quarter Report on V. C. Summer Units 2 and 3." The AP1000 reactor project was approved by the South Carolina PSC on March 2, 2009.

A Friends of the Earth analysis of the recent state review shows:

  • A near- half billion dollar ($478 million) cost overrun at the V.C. Summer reactor construction site: The PSC approved a $278 million cost increase in November 2012 that is being challenged by the Sierra Club. Though South Carolina Electric & Gas may try to hold CB&I, the maker of flawed modular components, liable for a $200 million overrun, it is possible that South Carolina. Ratepayers will be forced to pay for part of this cost increase. In spite of these identifiable cost increases, SCE&G claims the cost of the project has not increased.
  • A significant pushback in the delivery date for the new reactor: According to the state report, "SCE&G's Milestone Schedule reflects a delay in the Unit 2 substantial completion date from March 15, 2017 to December 15, 2017, and a delay from May 15, 2018 to December 15, 2018 in the Unit 3 substantial completion date." The state found that 16 key milestones for the new V.C. Summer reactor have been delayed already by 10 months or longer. Continuing problems with module construction already have resulted in major cost overruns and could mean overall delays of 18 months or longer, which must be approved by the South Carolina Public Service Commission.
  • Potentially serious problems loom with the design and manufacturing of the shield building, the large vented structure protecting the reactor containment and on which a passive cooling water tank is perched. The ORS reports stats that "Because of the production and quality issues associated with CB&I-LC, fabrication of the Shield Building modules has been reassigned to Newport News Industries in Virginia. Mobilization and preparation for production continued at NNI throughout the quarter. Although fabrication is now underway, no sub modules have been delivered to the site. A detailed schedule for their delivery is not yet available." The NRC will hold a public meeting on January 22 (http://meetings.nrc.gov/pmns/mtg?do=details&Code=20140042) to discuss the shield building design.
  • South Carolina Public Service Authority, Santee Cooper, a 45 percent partner in the project that is not regulated by the PSC, wants to divest all or part of its share. The board of Santee Cooper is likely to vote at the board meeting on January 27 to sell a portion of the project to Duke Energy.

The next SCE&G quarterly report is due 45 days after the end of the fourth quarter 2013. The ORS review will be released about 45 days after that.

Approximately $4.5 billion has already been spent on V.C. Summer to date.

Contact:

Tom Clements, (803) 240-7268, tclements@foe.org or Alex Frank, (703) 276-3264, afrank@hastingsgroup.com

Notes: Aerial photos of the V.C. Summer project, taken on December 24, 2013, by High Flyer, are available on request. One photo can be seen here.

SCE&G's third quarter 2013 report, dated November 8, 2013, can be found here.

Friends of the Earth fights to create a more healthy and just world. Our current campaigns focus on promoting clean energy and solutions to climate change, keeping toxic and risky technologies out of the food we eat and products we use, and protecting marine ecosystems and the people who live and work near them.

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