Duke Energy won’t buy a stake in two units under construction at the V.C. Summer nuclear plant in South Carolina, the company said Monday.
South Carolina Electric & Gas instead said it would pay state-owned utility Santee Cooper about $500 million for a 5 percent interest in the units.
Santee Cooper already owns a 45 percent share in the project but had been looking for partners – widely expected to be Duke – since 2010. Duke signed an intent to explore buying a 5to 10 percent share in 2011.
“The past few years have shown unprecedented volatility in base load fuel costs and increasing regulatory pressures on fossil-fueled generation,” Santee Cooper CEO Lonnie Carter said in a statement. “Today’s action reduces our costs to customers somewhat, while still preserving an ownership level that will position us well for the flexibility we will need going forward.”
Duke spokesman Rick Rhodes wouldn’t comment on the circumstances of that twist in events other than to say discussions with Santee Cooper were over.
“We wish them continued success in the future,” he said.
The decision won’t affect Duke’s decision on whether to build its own nuclear plant, Lee, near Gaffney, S.C. A federal license for that $11 billion plant isn’t expected until 2016. Duke would decide after that point whether to go forward with construction.
Because of high costs and the risk of delays, compounded by stagnant electricity sales in recent years, Duke has also shopped for partners in nuclear construction.
Last year, Duke canceled the contract for its planned Levy County nuclear plant in Florida. It has also shelved plans for two new reactors at the Shearon Harris plant near Raleigh.
Summer has run into construction problems that will delay the completion of its two units by nine months and seven months, until 2017 and 2018, respectively. The S.C. Public Service Commission has added $278 million to its base cost.
The units are being built by SCE&G, Westinghouse and Chicago Bridge & Iron, which has offices in Charlotte.
They will use Westinghouse Electric’s AP1000 reactor, a modular new design that is touted as simpler, safer and cheaper to build than past designs.
The delays at Summer, according to a report this month by South Carolina’s Office of Regulatory Staff, stem from problems by Chicago Bridge & Iron in delivering modules fabricated in Lake Charles, La., for assembly on site.
Other structures can’t be completed until those modules are in place.
The Lake Charles fabrication plant “continues to be the focus of intense management attention,” the ORS report said. The company shifted some module work to other contractors to speed up deliver times, it said, and is working around the clock in Lake Charles.
Project guidelines deem construction on schedule unless completion is delayed by more than 18 months. About 2,000 workers are on the site in Jenkinsville, S.C., northwest of Columbia.
SCE&G said it would buy its additional share in the units in three stages between the plant’s opening date and its second anniversary.
The additional 5 percent of nuclear capacity will help replace retiring coal-fired power plants and delay the need to build new gas-fired plants, the company said.
Henderson: 704-358-5051; Twitter: @bhender
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