Utility companies were warned before S.C. nuke plant flop

COLUMBIA, S.C.—Utility companies were warned more than a year ago that a South Carolina nuclear reactor project was doomed, yet failed to heed warnings that could have saved the venture, according to a summary of a report prepared by a major project management company.

The March 2016 summary describes recommended changes Santee Cooper and South Carolina Electric & Gas Co. (SCE&G) needed to make to the construction of two new reactors at the V.C. Summer Nuclear Station, including hiring someone to enforce contractor accountability and holding regular meetings with contractors.

The Associated Press obtained the summary recently.

SCANA, SCE&G’s parent company, and Santee Cooper didn’t immediately respond to messages seeking comment.

The utilities in 2014 hired Bechtel Corp., a global engineering, construction and project management company, to do an independent analysis of the project.

State lawmakers probing the project’s failure have sought the report, which they hope will shed light on why ratepayers have been forced to fund the now abandoned reactors that are only one-third complete.

Gov. Henry McMaster, who has said he’s looking for a way to save it, has also requested the report’s release.

Santee Cooper board chairman Leighton Lord has said the report led the board to call for an independent construction monitor at V.C. Summer, but that notion was rejected by SCANA, which was primarily in charge of building and starting the reactors.

The project was already years behind schedule and billions over budget when Westinghouse declared bankruptcy in March, voiding a fixed-price contract negotiated in 2015 to limit costs to $14 billion.

Utility executives, who had already jointly spent nearly $10 billion, said they were forced to give up on the project after determining the price tag for its completion, budgeted at $11 billion in 2008, had soared beyond $20 billion.

SCANA officials have said the company heavily guarded the report’s release because the utilities hired Bechtel in anticipation of suing Westinghouse, which designed the reactors and was lead contractor on the project.

The post-bankruptcy-analysis also concluded both reactors could not be operational until 2024.

Utility customers have paid more than $2 billion on the failed project through rate hikes since 2009.

The companies don’t expect to refund anything, and customers could end up having to pay off that debt over decades.

While the utility executives blamed Westinghouse, senators said the utilities have known for years that problems existed yet failed to change course.

Last month, Santee Cooper officials testified the project never had a detailed construction schedule, with state regulators approving expansions based on "generic" schedules not specific to the site.

Utility executives said they tried unsuccessfully for years to get a full schedule from Westinghouse, which owns the technology for reactors not previously built in the United States, but instead they were given six months of plans at a time, which would inevitably have to be rescheduled.

State officials have said schedules did exist but were never followed. SCE&G updated their budget and timetable each quarter, giving regulators "no lawful way" to deny a rate hike request, Duke Scott of the Office of Regulatory Staff testified last month.

Lonnie Carter, recently retired as Santee Cooper’s CEO, told senators his utility first "raised concerns" about the project in 2013, causing the utilities to hire Bechtel for the independent analysis.

At least three lawsuits have been filed over the failed project, with plaintiffs accusing the utilities of mismanagement and seeking some sort of compensation for fronting the failed projects for years.