South Carolina Electric & Gas is seeking to surrender the operating licenses for the two unfinished reactors at the V.C. Summer site under a plan to preserve a valuable tax write-off that would cushion the financial blow to ratepayers.
SCE&G parent company SCANA Corp. said the filing with the Nuclear Regulatory Commission followed its July 31 notification to the federal agency "that the company stopped construction activities" on the units.
The move was widely expected. SCANA had been staring down a Dec. 31 deadline to formally abandon the V.C. Summer Nuclear Station expansion in order to qualify for about $2 billion in federal tax deductions that could lower the amount SCE&G customers will have to pay for the failed project.
The value of those deductions would decrease by hundreds of millions of dollars if SCANA did not act before 2018. The Cayce-based utility owner still requires approval for the write-offs from the Internal Revenue Service.
“This notification is consistent with our plans for abandonment and helps to ensure we qualify for a tax deduction in 2017 so that we can capture approximately $2 billion for our customers to offset the costs of the new nuclear project,” Iris Griffin, the company's incoming chief financial officer, said in a written statement Thursday.
SCE&G said the purpose of the four-page "redress plan" is to notify its federal regulators that it has "irrevocably" abandoned its interests in the Fairfield County reactors.
Jeffrey Archie, the company's chief nuclear officer, said the units were about 40 percent finished when construction was halted.
"All of its completion and preservation activities have ceased," Archie told the commission in a letter included with the Dec. 27 filing. "Work is limited to only those actions required to place the site in a safe condition, terminate construction and close active permits."
SCE&G is floating the idea of transferring the operating licenses for the reactors to state-owned Santee Cooper, which owned 45 percent of the V.C. Summer project. The Moncks Corner-based electric utility has not agreed to accept or reject that proposal.
"Too many unknowns at this point," Santee Cooper spokeswoman Mollie Gore said Thursday.
The two South Carolina power providers abandoned the V.C. Summer expansion in July after spending more than $9 billion on it.
While the Midlands project was hampered by construction delays and cost overruns, both utilities blamed the failure largely on the bankruptcy by primary contractor Westinghouse Electric earlier this year.
Customers have been charged nearly $2 billion to finance SCE&G's 55 percent stake in the project through a flurry of rate increases over the past eight years. They're still paying $34 million a month for the V.C. Summer expansion, though lawmakers and state regulators are threatening to cut off that revenue stream.
Santee Cooper has taken on about $4 billion in debt to fund its portion of the project.