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SCANA and Santee Cooper to study joint nuclear venture
By Shelia Watson
Contributing Writer
Rival utility companies SCANA, owner of South Carolina Electric & Gas Co., and Santee Cooper have announced they will study the possibility of constructing a new nuclear generation facility to meet growing electricity needs.
The evaluation process will involve consideration of various types of base-load generation, including natural gas-fired plants, coal-fired plants and nuclear plants.
The two companies already have a nuclear generation joint ownership agreement, with the companies working together to generate electricity at the V.C. Summer Nuclear Station in Jenkinsville, which opened in 1983.
“We decided to enter into this current study together because of how well we’ve been working together at the V.C. Summer facility,” says SCANA spokesperson Robin Montgomery. “It’s a 1,000-megawatt facility. We own two-thirds of it, Santee Cooper owns one-third and we operate it. It’s proven to be a very successful partnership.”
The last license issued for construction of a nuclear plant was in 1973 at Three Mile Island.
The U.S. nuclear industry slowed considerably after an accident at that facility in 1979. Because of strict federal regulations and prohibitive costs, most utilities have not pursued nuclear development.
However, the Bush Administration is encouraging utility companies to pursue nuclear power with a sweeping energy bill signed into law this month. The Energy Policy Act of 2005, intended to establish a comprehensive, long-range energy policy, passed in the House with a bipartisan vote of 275 to 156 and in the Senate with a bipartisan vote of 74 to 26. President Bush signed the Act into law on Aug. 8 at Sandia National Laboratories in Albuquerque, N.M.
Passed in an attempt to combat growing energy problems, the massive 1,725-page legislation offers a wide range of measures aimed at expanding and diversifying the country’s fuel supplies, including bolstering nuclear energy research and development.
The $4.6 billion earmarked for nuclear power provides incentives for building new reactors, including loan guarantees, production tax credits and risk protection.
Included is authorization for cost-overrun support of up to $2 billion total for up to six new nuclear power plants.
The support will help offset the financial impact of delays (beyond industry’s control) that might occur during construction and at the start of operations.
The full cost of delay up to $500 million each would be offered for the first two reactors; 50% of delay costs up to $250 million would be offered for reactors three through six.
The legislation provides tax incentives and loan guarantees for up to 80% of the cost for energy production of various types.
The production tax credit, limited to $125 million total per year, includes 1.8 cents per kilowatt-hour for the first 6,000 megawatt-hours from new nuclear power plants for the first eight years of operation. The credit places nuclear energy on equal footing with other sources of emission-free power.
The loan guarantees are designated for innovative technologies that avoid greenhouse gases, which, along with clean coal and renewable energy, include nuclear reactor designs.
Included in the act are provisions for extending the Price-Anderson Nuclear Industries Indemnity Act, which limits the liability insurance obligations for nuclear plant operators, through 2025—the longest extension ever granted by Congress.
The process to permit and build any major base load generation facility can take eight to 10 years, and the companies say they must realistically start to look at the feasibility of building a new plant now.
“South Carolina must be committed to investing in its future energy needs in order to maintain our quality of life and meet our growing energy demands,” said Lonnie Carter, Santee Cooper president and chief executive officer.
Montgomery says the two companies are in the early stages of planning and have no timetable at this time. “We’re in the fortunate position of not having to bring on new generation immediately. As a utility company, we have a reserve margin in the 12 to15 percent range, and that’s a number we’re comfortable with.”
“We’re in no great hurry to do something,” Montgomery says. “It’s more important for us to make a good decision than to try to do something fast,” Montgomery says. “It’s more advantageous for us to gather information and work toward our decision-making process and move when we feel like we have that information in hand.”
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