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Duke Energy bows out of the running for V.C. Summer project as it nixes a separate nuclear plant in S.C.

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Duke Energy says it won’t help restart construction on the V.C. Summer Nuclear Station in Fairfield County, dimming hopes for the project’s revival hours after the power company nixed plans for a separate nuclear plant in South Carolina.

Charlotte-based Duke represented one of the best hopes for restarting the project, which was canceled last month amid budget overruns, construction delays and uncertainties about its contractor’s future.

Duke is South Carolina’s largest electric provider, and it was one of the three primary utilities Gov. Henry McMaster initially contacted about buying a stake in the Midlands project. And until Friday, it was the only other power company with plans to develop nuclear power in the Palmetto State.

"We looked at this from every angle, and we concluded that it is not feasible for us to take on," Duke spokesman Ryan Mosier said in an email.

South Carolina Electric & Gas and the state-owned power company Santee Cooper pulled the plug on their plans to add two new nuclear reactors at V.C. Summer late last month after they determined the project would cost at least $21 billion.

That was roughly double the original price estimate, and it came after the two utilities had spent a combined $9 billion.

The re-evaluation came after lead contractor Westinghouse Electric, which designed the nuclear reactors, filed for bankruptcy protection in March amid mounting costs at the South Carolina construction site and a similar project in Georgia. That essentially left the utilities with no safety net if they continued.

"The project is far too expensive and the uncertainties around the ultimate completion and operation are far too great for us to accept on behalf of our customers and owners," Mosier said.

Duke offered the same explanation to North Carolina regulators on Friday when it asked for permission to abandon its plans to build the Lee Nuclear Station near Gaffney, about 30 minutes northeast of Spartanburg in Cherokee County.

Unlike the Fairfield County project, the Lee plant never broke ground. But in a filing with the North Carolina Utilities Commission, Charlotte-based Duke said it had spent $542 million to acquire land and design the project.

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Duke says its South Carolina customers will be on the hook for about 30 percent of the abandoned project, but it will wait before asking regulators in Columbia for permission to charge customers in the Palmetto State for the work. Mosier said it would file for a rate increase eventually, but "not this year."

Duke’s decision was based in part on the demise of the V.C. Summer expansion. The two projects planned to use the same reactor design, and Duke told regulators that it would have limited opportunity to "assess project execution strategies and risk."

Duke got federal approval for the project late last year, shortly before Westinghouse filed for bankruptcy protection.

The announcements highlight the chilling effect the V.C. Summer project could have on the U.S. nuclear industry. Along with the Georgia project, it was one of the first nuclear construction efforts in the country in three decades.

Work has continued in Georgia, but the project’s majority owner, Southern Co., says it’s still evaluating its options. And in Florida, NextEra Energy says it’s looking to "pause" work on another reactor project using the Westinghouse design.

The uncertainty swirling around the industry sets up a challenging environment for McMaster’s efforts to rescue the project.

The governor says his office has had talks with "a number" of power companies that might be interested in buying Santee Cooper’s 45 percent stake in the V.C. Summer expansion. At an appearance in the Lowcountry on Thursday, he declined to say which companies he'd talked with or how many had reached out.

Outgoing Santee Cooper CEO Lonnie Carter, meantime, said this week that "viable" offers have not been forthcoming. Carter said he’s heard from two interested parties, but neither has the financial resources to finish such a massive project.

Aside from Duke, McMaster has named two other power companies publicly. Virginia-based Dominion Energy and Atlanta-based Southern Co. have declined to discuss their analysis of the Fairfield County project.

Reach Thad Moore at 843-937-5703. Follow him on Twitter @thadmoore.

Watchdog and Public Service reporter

Thad Moore is a reporter on The Post and Courier’s Watchdog and Public Service team and a graduate of the University of South Carolina. To share tips securely, reach Moore via ProtonMail at thadmoore@protonmail.com or on Signal at 843-214-6576.

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