Gov. Henry McMaster and lawmakers should demand that Santee Cooper and Westinghouse Electric Co. set aside their legal differences to take advantage of a time-sensitive chance to sell tens of millions of dollars worth of stockpiled nuclear reactor parts. Recouping some of the billions of dollars squandered on the failed V.C. Summer project would be the rare bit of good news to come out of the debacle.
An offer from Georgia’s Southern Co., which is building identical reactors, is due to expire in two weeks.
Debt-laden Santee Cooper has paid millions of dollars to mothball reactor components in warehouses and at the V.C. Summer construction site in Fairfield County. But according to a Westinghouse lawsuit aimed at forcing a sale, the state-owned utility has already balked at a deal worth about $8 million because it doesn’t want to share any of the proceeds with Westinghouse.
Reasonably, Westinghouse has suggested putting the proceeds in a restricted bank account until the dispute can be settled. That seems fair enough, considering that the two Westinghouse AP1000 reactors being built in Georgia are the only two under construction in the United States. The next likeliest markets would be China, the only country to have successfully completed one of the designs, or India.
With about $4 billion in nuclear-construction debt, Santee Cooper could use the cash, and the opportunity may not come again. Unless major reactor components such as steam generators, turbines and pumps are properly maintained, they could become worthless, except as scrap.
In a statement Monday, Santee Cooper said Westinghouse’s lawsuit “seeks to strip value away from Santee Cooper customers and instead profit itself.” In a competing statement, Westinghouse said Santee Cooper was refusing to let it sell the equipment and puzzled by its stonewalling, “particularly in light of the urgent and special nature of this opportunity.”
Westinghouse’s day in court can wait. The company, which filed for reorganization bankruptcy in 2017 and was later sold by parent Toshiba to Brookfield Business Partners, contends it wasn’t fully paid for all the reactor parts shipped to the V.C. Summer site. SCE&G, the majority partner in the nuclear project, has already relinquished its ownership of components, which should leave the ownership battle relatively clear cut.
There are no doubt at least two sides to the legal dispute. But at this point, unless Santee Cooper can demonstrate that there is a realistic chance it can sell the equipment to someone else for a better deal, its board shouldn’t look a gift horse in the mouth. It should negotiate a fair price and cash out, because Westinghouse and its suppliers presumably would be happy to supply Southern Co. with all new parts.
The standoff also demonstrates a need to give the governor more control of Santee Cooper’s management. Ideally, he could simply order the utility to proceed with the sale. Just last week, the S.C. House voted to strip the board of some of its autonomy and give the governor more authority over how Santee Cooper is run, while also giving the Legislature some power the governor should have. But none of that will solve the immediate problem.
The governor and Legislature must use what’s at hand — the bully pulpit and the power of informal persuasion — to keep Santee Cooper from botching a potentially lucrative deal to unload some otherwise unusable hardware. Sell it now while there’s a viable nearby market.