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Santee Cooper to settle with Westinghouse over parts at abandoned SC nuclear project

Santee Cooper

Santee Cooper is prepared to settle a legal dispute with Westinghouse Electric, which could free up the state-run utility to sell parts leftover at the abandoned V.C. Summer nuclear project. File/Staff

Santee Cooper is prepared to end a legal battle with the former contractor at the failed V.C. Summer nuclear project and sell off the remaining material left at the abandoned construction site.

The state-owned utility’s board of directors voted Thursday on the basic terms of a settlement with Westinghouse Electric, which was initially responsible for designing, engineering and building the two unfinished reactors in Fairfield County.

Mark Bonsall, Santee Cooper’s CEO since July, will now be in charge of hashing out the specifics of that deal, which will end a months-long lawsuit in federal court.

Dan Ray, acting chairman of Santee Cooper’s board, said it took a lot of work to get the legal settlement to where it is today. The negotiation was “technical and complicated,” he said.

Both Santee Cooper and Westinghouse claimed ownership of the leftover parts. Westinghouse filed for bankruptcy prior to the nuclear project’s cancellation in July 2017.

The pending agreement, Bonsall said, will free Santee Cooper up to cash in on the leftover material and nuclear equipment, which has remained at the construction site for nearly three years.

Westinghouse is also expected to make some money off the deal, Bonsall said.

Santee Cooper purchased the vital nuclear components for the reactors during construction, Bonsall said, but Westinghouse retained the intellectual property rights to those specialized pieces of equipment.

That gave Westinghouse leverage to bring Santee Cooper to the negotiating table. The Moncks Corner-based utility would not have been able to resell some of the more expensive nuclear components at a decent price without Westinghouse’s cooperation.

The basic idea is that Westinghouse and Santee Cooper will share the proceeds from any parts that are sold. The utility will cash in on the remaining rebar, wiring, piping other material by itself.

“Right, wrong or indifferent, they have a valid point that the other equipment has no value without the intellectual property that goes along with it,” Bonsall said following the board meeting. “You can’t use it in a nuclear installation without their consent.”

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Westinghouse did not return a call seeking comment.

Last year, Santee Cooper estimated the remaining parts and material at V.C. Summer station could fetch up to $425 million at sale. Bonsall said he still expects Santee Cooper to get roughly the same price, even as it shares part of the proceeds with Westinghouse.

Santee Cooper’s leadership hopes to use the money gained from the leftover parts to help pay down the $3.6 billion in bond debt it owes for the abandoned reactors.

That extra income could help Santee Cooper make their case to the S.C. Legislature as state lawmakers prepare to vote this year on whether to sell the 86-year-old public utility.

The 170 lawmakers in the House and Senate are particularly worried about Santee Cooper’s current debt load and what that could mean for the monthly electricity bills for the utility’s direct customers and the members of the 20 electric cooperatives it supplies with power.

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.