Cost overruns, delays continue for SCE&G's V.C. Summer nuke plant

Dive Brief:

Construction of two new units at South Carolina Electric & Gas Co.'s V.C. Summer nuclear plant is falling further behind schedule and faces millions of dollars in construction delays, the utility said last week.
SCE&G has filed a petition with the state regulators, revising project completion dates to 2019 and 2020 respectively for the two units and including incremental capital costs that total $698 million.
Although construction cost estimates have increased, the utility said favorable changes in the financing costs, inflation and production tax credits are expected to offset the ultimate cost to customers.

Dive Insight:

SCE&G filed a petition with the Public Service Commission of South Carolina last week, informing regulators that the construction schedule and costs would need to be updated for for the two new nuclear units being constructed at the V.C. Summer plant in Jenkinsville.

The construction schedule reflected in the petition, without consideration of all mitigating strategies, indicates a substantial completion date for Unit 2 of June 2019 and a substantial completion date for Unit 3 of June 2020. The Washington Post reports the new targets are more than two years past their original completion estimates.

The petition includes incremental capital costs that total $698 million, of which $539 million are associated with the delays and other contested costs. The total project capital cost is now estimated at approximately $5.2 billion (SCE&G’s portion in 2007 dollars) or $6.8 billion including escalation and allowance for funds used during construction (SCE&G’s portion in future dollars).

“Substantial progress has been made towards the completion of the units,” said SCANA Chairman and CEO Kevin Marsh.

Marsh said 85% of the major equipment for Unit 2 has been received on site, the containment vessel bottom heads of both units have been set, and all three of the steel rings that comprise the vertical walls of the Unit 2 containment vessel have been completed or are near completion. Also, the first ring for Unit 2 has been set in place.

However, Marsh said the company is "not pleased with the delays in the construction schedule for our new nuclear plants. ... With a construction project of this scale we knew there would be challenges along the way escalation on the project to date, and we have locked in significantly lower long-term financing costs than projected on a large portion of the project’s debt financing. We also expect more production tax credits to benefit our customers once the units are online."

SCE&G said it expects a hearing date this summer with an order due by the middle of September.