CONSULTING

characterization; even the South Carolina Office of Regulatory Staff, which represents the public’s
interest in utility regulation, was openly skeptical, with the agency’s executive director putting it
bluntly: “This is not a fixed-price contract (…). [This proposal’s] got some aspects of a fixed price,
but there’s stuff in there that’s not fixed and we are going through that now”. 478 Including this cost
increase, according to the filing made by SCE&G, “the capital cost estimate (…) is US$6.8 billion in
2007 dollars and US$7.7 billion with escalation.” SCE&G is currently a 55 percent owner of the
project, with Santee Cooper owning the other 45 percent (set to go down to 40 percent), which
means that the overall cost of the project is now around US$14 billion. 479 In June 2016, SCE&G
filed a request with the Public Service Commission of South Carolina and the South Carolina Office
of Regulatory Staff to increase to its approved electric rates under provisions of a state law known
as the Base Load Review Act, which allows the state’s regulated utilities to adjust rates annually
during construction of nuclear power plants to recover related financing costs. 480 At this point,
over 18 percent of the electricity bill of residential consumers is estimated to be attributable to
the construction of the two nuclear reactors.
In February 2016, Tennessee Valley Authority (TVA) abandoned plans “to build two AP1000
pressurized water reactors at the Bellefonte site in Alabama and notified federal authorities it is
withdrawing its application for two combined construction permits and operating licenses at the
site”. 481 Explaining the decision, a TVA spokesperson said: “It doesn't make sense to keep the
licenses since it will be decades before we need the new generation”. TVA already has two partially
constructed nuclear plants at the Bellefonte site and it has decided to leave them “in preservation
status and continue to spend a minimum yearly amount for their maintenance and security”. 482
The poor experience with the construction of the AP1000s at Vogtle and VC Summer has been
hard for Toshiba, the owner of Westinghouse. As one commentator put it, the “design changes and
construction delays at both Vogtle and Summer added hundreds of millions of dollars in additional
costs, turning the promise of newbuild into something of a nightmare for Toshiba”. 483 No one
expects any new AP1000s to be ordered in the United States—a significant drop from the
expectation in the mid-2000s when Toshiba acquired Westinghouse in the expectation that there
would be at least 14 AP1000s constructed in the United States. 484
478 Ibidem.
479 Tom Clements, “SCE&G Requests $852 Million Increase in Cost of VC Summer Nuclear Construction
Project”, Savannah River Site Watch, 2 June 2016, see
http://www.srswatch.org/uploads/2/7/5/8/27584045/news_srs_watch_on_sceg_nuclear_cost_increase_june_
2_2016.pdf, accessed 16 June 2016.
480 Yahoo Finance, “SCE&G Files for Rate Adjustment Under Base Load Review Act,”, 27 June 2016, see
http://finance.yahoo.com/news/sce-g-files-rate-adjustment-210500545.html, accessed 1 July 2016.
481 Mary Powers, “TVA puts Bellefonte nuclear power units on hold, while other utilities move forward”,
Platts, 16 February 2016, see http://www.platts.com/latest-news/electric-power/birmingham-alabama/tvaputs-bellefonte-nuclear-power-units-on-hold-21942467,
accessed 16 June 2016.
482 Ibidem.
483 Daye Kim, “Toshiba-Westinghouse — A Dream Deal Gone Sour?”, NIW, 2015,6–7.
484 Ibidem.
Mycle Schneider, Antony Froggatt et al. 137 World Nuclear Industry Status Report 2016