So much for being prudent.
SCANA and Santee Cooper agreed in 2008 to move forward with construction on two new nuclear reactors without a final design, with an estimated price tag of more than $10 billion, which would eventually nearly double.
The Westinghouse design was new and untested, as evidenced by the multiple revisions — including as late as 2011 — the company submitted to the federal Nuclear Regulatory Commission.
Westinghouse knew that design issues might be a problem, according to correspondence from its CEO Danny Roderick obtained by two environmental groups and detailed in a Post and Courier report on Tuesday. But Westinghouse officials pushed back when SCANA and Santee Cooper started to raise concerns about delays and cost overruns almost immediately after construction began in 2013.
The same emails suggest that Westinghouse, SCANA and Santee Cooper kept customers and shareholders — and state regulators — in the dark.
In the meantime, both utilities proceeded to periodically and substantially raise rates in order to pay for a project they knew was likely to go over budget and fall behind schedule — if they could complete it at all.
In fact, customers are still paying those higher rates, more than eight months after the reactors were abandoned.
And SCANA and Santee Cooper officials expect customers to continue to pay for decades until they recoup their $9 billion wasted investment.
Where to even start?
It is frustrating that Santee Cooper and SCANA couldn’t finish the reactors. It is maddening that they expect customers to pay for something they will never use.
It is baffling that two South Carolina utility companies would consider it appropriate to collect ratepayer money for such a massively expensive first-of-its-kind reactor project, for which problems multiplied.
It is disturbing that Westinghouse was allowed to market an untested design not just to Santee Cooper and SCANA but to several other customers around the world, including Georgia Power, which continues to spend billions on two reactors in Georgia.
It’s also worth noting that not a single one of the eight Westinghouse AP1000 reactors around the world has been fully switched on yet. Only one — in China — is complete. All have run at least three years behind schedule so far.
And it is simply astounding that Westinghouse, SCANA and Santee Cooper withheld vital information from regulators, lawmakers, their investors and the ratepaying public for years even as the nuclear project spiraled further out of control.
None of this is prudent, under even the most generous interpretation of that word. And that matters.
State legislators, Gov. Henry McMaster, regulators and law enforcement officials are looking into the nuclear debacle. But the most critical component in determining the impact on electric customers will be the so-called “prudency clause” in the 2007 Base Load Review Act.
SCANA can only continue to recoup costs for the reactors if those costs are determined to be prudent. Clearly they weren’t, and from almost the very beginning.
Santee Cooper, for better or for worse, is not covered by the BLRA. Protecting that utility’s customers will likely prove more challenging, and could involve its sale to the state’s electric cooperatives or a private company. Any decision must put customers first.
In the meantime, the investigations and policy proposals will continue. But it is increasingly clear that while many words could be used to describe the V.C. Summer nuclear mess, “prudent” is not one of them.