House ratepayer committee

A new House committee met for the first time on August 23, 2017 to review the cancellation of two nuclear reactors at the V.C. Summer station in Fairfield County. 

COLUMBIA — SCANA Corp., the majority owner of the two failed nuclear reactors in Fairfield County, applied to build the new power plants in 2008 without a reliable construction timetable and a generic schedule the utility knew was incapable of estimating costs.

That was the major finding that came out of a special House committee hearing Wednesday where lawmakers reviewed the $9 billion cancellation of the state-of-the-art nuclear reactors at the V.C. Summer station. 

The panel met for the first time to review the actions of state regulators, investor-owned SCANA and state-run Santee Cooper, which is the minority owner of the project.

Witnesses at the hearing told lawmakers that SCANA, the parent company of S.C. Electric & Gas Co., applied to build the reactors with a schedule they knew wasn't legitimate. The admission caused some lawmakers to react with astonishment. 

"We embarked on a multi-year, multi-billion project with a road map that we didn't really believe in?" asked state Rep. Kirkman Finlay, R-Columbia. "Help me understand how we could have planned it less thoroughly."

Rep. Russell Ott, D-St. Matthews, questioned why state regulators with the state Public Service Commission agreed to approve a generic construction and price estimate that the company knew wasn't specific enough to meet the ambitious energy project. 

The major reason that state regulators and state utility staff went ahead with the unspecified plan, witnesses said, was because state lawmakers had voiced their approval of the nuclear units by passing the Base Load Review Act in 2007, which provided huge incentives to build large-scale power plants. 

Dukes Scott, the director of the Office of Regulatory Staff, fielded questions for hours from lawmakers Wednesday but the members of the PSC couldn't testify because of concerns that doing so could open the state up to legal challenges by SCANA. 

The lack of a legitimate schedule didn't bother SCANA in 2009, witnesses said, because the 2007 state law put all of the risk for the project onto electric customers and ensured the utility could recoup their money even if the project was cancelled.

It also allowed them to charge customers while construction was underway, a dramatic change from traditional utility regulation. 

"Everything that could have gone wrong did go wrong," said Scott Elliott, an attorney who represents large industrial electric customers, said of the Base Load Review Act. 

The House hearing came less than a day after state senators held a marathon hearing as well in which they questioned state regulators and the leaders of Santee Cooper and SCANA, the parent company of South Carolina Electric and Gas. 

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That Senate hearing also revealed the two state utilities never received a fully-integrated construction schedule from now-bankrupt Westinghouse, the company that designed the new reactors.

SCANA's executives said the schedules they were operating from were far more generic and nothing like the highly-specific work orders needed on such a large and complex construction project. 

The political reviews of the failed construction effort are just beginning. State senators have already planned another hearing in September, and state representatives are planning the same.  

"We are going to meet as much as it takes, as long as it takes," said Rep. Peter McCoy, R-Charleston, as he kicked off the hearing. 

House Speaker Jay Lucas, R-Hartsville, called the failure of the nuclear reactors near Jenkinsville a "financial disaster" for the state and one that likely can't be righted. He said the House committee should reassure electric customers in the state that their monthly bills wouldn't be used to fund mismanagement in the future. 

"I believe it is fair to say that there is plenty of blame to go around," said Lucas, adding that lawmakers bear some responsibility for failed reactors too. 

The electric customers served by Santee Cooper and SCE&G, Lucas said, are the only truly innocent party involved in the decade-long failure to restart the nuclear power industry in the United States. 

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