UPDATE 1-Scana ends dispute over early nuclear costs

Thu Mar 29, 2012 11:55pm GMT
 

* Scana unit to pick up $138 million in early cost overruns

* First Summer reactor operation delayed one year to 2017

* U.S. regulators to vote on Scana license Friday

March 29 (Reuters) - Scana Corp's South Carolina utility said on Thursday it reached a preliminary pact to settle a dispute over early cost overruns for its proposed new nuclear reactors, a day before U.S. regulators are expected to vote to allow construction to move forward.

Scana's South Carolina Electric & Gas Co (SCE&G) and its partner, state-owned electric agency Santee Cooper, want to build two AP1000 reactors at the Summer nuclear site near Jenkinsville, South Carolina, at a projected cost of $9 billion.

Scana also revised its timeline to complete the reactors, delaying the first reactor's start date to 2017, a year later than earlier expected. Scana said the second Summer unit is now seen coming online in 2018, a year earlier than scheduled, the company said in a release.

SCE&G, Westinghouse, and the Shaw Group have been negotiating who is responsible for certain increased costs to build the two new reactors for several months.

SCE&G, which owns 55 percent of the project, said its portion of the increased costs will be $138 million, or $50 million less than they had previously disclosed.

Some of the increased costs relate to a delay in obtaining a combined operating and construction license for the two new Summer reactors from the U.S. Nuclear Regulatory Commission, SCE&G said.

"We are pleased that we were able to resolve these issues through negotiations," said Scana Chief Executive Kevin Marsh. "We remain firmly committed to construction of these two units and can now focus on receipt of our license from the NRC and proceeding with full nuclear construction."

Scana said despite the early cost overruns, it remains confident the plant can be completed within its $6 billion cost allocation which has been approved by the South Carolina Public Service Commission.

The U.S. Nuclear Regulatory Commission (NRC) has scheduled a vote on Scana's application to build and operate the new reactors Friday.

In February, the NRC voted 4-1 to issue the first license in 30 years to build two new reactors in the United States, approving Atlanta-based Southern Co's plan to build two AP1000 reactors in Georgia.

Westinghouse is majority-owned by Japanese multinational Toshiba Corp.

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