http://www.cleanenergy.org/2017/04/21/westinghouse-bankruptcy-nuclear-train-wrecks/

SACE | Southern Alliance for Clean Energy

Westinghouse Bankruptcy: Nuclear Train Wrecks for Georgia and South Carolina

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toshiba-finacial-meltdownOn March 29, 2017, Westinghouse Electric Corp. filed for Chapter 11 bankruptcy as a result of the massive cost overruns for the nuclear project construction at Southern Company’s Plant Vogtle (subsidiary Georgia Power) in Georgia and SCANA’s (subsidiary SCE&G) and Santee Cooper’s V.C. Summer plant in South Carolina.

Westinghouse is a subsidiary of Japanese tech giant Toshiba and the designer and builder of the four under construction AP1000 nuclear reactors at Vogtle and Summer. The reactor design is yet to be operational anywhere in the world. The projects in both South Carolina and Georgia have been plagued with problems and are nearly four years delayed and many billions of dollars over budget. In fact, all four reactors were supposed to be operating by now (April 1, 2017 to be exact).

Toshiba has reported that their losses, which are in excess of $6 billion (and climbing) because of the failed nuclear projects in Georgia and South Carolina, have created “substantial uncertainty” over its ability to continue operations, which is also affecting its other tech businesses. Toshiba’s financial meltdown puts these new reactor projects on even shakier ground.

Georgia Power, SCE&G, and Santee Cooper, as well as Toshiba and Westinghouse, took a significant gamble on nuclear power and lost, leaving consumers holding the bill for billions of dollars. We need your help today to stop this abuse and tell the utilities and regulators to stop throwing good customer money after bad!

Georgia’s Nuclear Train Wreck: Plant Vogtle Construction

ga-trainwreck-snap-300x202In 2009, the Public Service Commission (GA PSC) approved Georgia Power to build two additional Toshiba-Westinghouse AP1000 nuclear reactors at Plant Vogtle in Waynesboro, Georgia along the Savannah River. Meanwhile, the state legislature passed the “Georgia Nuclear Energy Financing Act,” which allowed Georgia Power to begin collecting the costs of financing the project from customers during construction. Construction of the project began that year but immediately ran into problems that have continued today, resulting in major delays and cost overruns. Despite these concerns, the GA PSC has continuously approved Georgia Power’s requests increasing charges on customers —reviewed expenditures for Georgia Power’s share now total $3.68 billion. Vogtle Units 3 and 4 were originally scheduled to come online April 1, 2016 and April 1, 2017, respectively. Newly revised schedules from Westinghouse, as disclosed in their February 2017 earnings call, estimated the completion date of Vogtle Unit 3 as December 2019 and of Unit 4 as September 2020. Georgia Power is 45.7% owner of the project and is regulated by the PSC. The remaining utility partners are Oglethorpe Power (30%), MEAG (22.7%) and the City of Dalton (1.6%). Learn more here.

South Carolina’s Nuclear Train Wreck: V.C. Summer Construction

sc-train-wreck-memeIn 2007, the state legislature passed the anit-consumer Base Load Review Act, which allowed utilities to begin charging customers for the financing costs for new power plants before they are built. In 2009, the South Carolina Public Service Commission (SC PSC) approved SCE&G’s request to build two Toshiba-Westinghouse AP1000 nuclear reactors at their V.C. Summer nuclear plant near Jenkinsville along the Monticello Reservoir (formed by the Broad River), about twenty miles northwest of Columbia, South Carolina. Problems ensued almost immediately, resulting in major delays and cost overruns, but the SC PSC has continuously approved SCE&G’s nuclear rate hike requests. V.C. Summer Units 2 and 3 were originally scheduled to come online April 1, 2016 and April 1, 2017, respectively. Newly revised schedules from Westinghouse, as disclosed in their February 2017 earnings call, estimated the completion date of V.C. Summer Unit 2 as April 2020 and of Unit 3 as December 2020. SCE&G is 55% owner in the project and is regulated by the SC PSC. Santee Cooper is 45% owner.

What happens next?

The short answer is that no one exactly knows. The projects are clearly in turmoil. Short-term agreements between Westinghouse and Southern Company and SCANA were arranged to keep construction underway, which would allow Westinghouse to continue construction activities, until April 28, 2017. However, Westinghouse, under bankruptcy protection, will no longer have to pay costs relating to the construction – instead the utilities are paying Fluor, another key contractor on each project, and Westinghouse directly. This agreement may be extended, or it could end.

The utility partners in these projects must decide what to do: will they abandon the project, will they continue building the reactors, and if so, who will build it? There are few companies in the world with the capability to do so.

What are these projects costing ratepayers?

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SACE’s Sara Barczak speaks with WISTV.com in Columbia, SC. about impacts to ratepayers. Click the image to be taken to the news article.

Major delays in project construction cost customers a lot of money. Each day of delay costs customers millions of dollars. With the projects nearly four years delayed, the costs to consumers add up fast.

Georgia Power customers are already paying more than 9.7 percent of their monthly bills, or roughly $90 a year, in Nuclear Construction Cost Recovery (NCCR) costs. Over $1.8 billion just in pre-collected financing costs have been charged to ratepayers since 2011 due to anti-consumer state legislation passed in 2009 to incentivize building new reactors. The Vogtle project’s original approximated cost of $14.1 billion is now estimated to cost well over $20 billion.

V.C. Summer’s owners are SCANA’s SCE&G at 55% and Santee Cooper at 45% and the project has experienced a 21% cost increase. According to the South Carolina Office of Regulatory Staff, the average SCE&G’s residential customer is currently paying over 18% of their monthly bill or over $27 per month in pre-collected financing costs (totaling over $1.4 billion) because of the Base Load Review Act. The SPC PSC has saddled customers by approving SCE&G’s nine nuclear rate hike increases! Santee Cooper admits spending over $3.8 billion thus far on their 45% share of the project.

Despite billions and billions of dollars spent and more than eight years into construction, Vogtle is only 36% complete and V.C. Summer is approximately 31% complete! If construction continues, many billions of dollars of customers’ money will continue to get spent.

Enraged? Get engaged!

Since these projects began, SACE and our partners have continuously highlighted the ongoing, systemic problems with both projects. We need your help in educating your family, friends and neighbors about this issue to ensure all consumers are protected from this utility abuse of power.

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