COLUMBIA, S.C.--(BUSINESS WIRE)--South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), today received approval from the South Carolina Public Service Commission (PSC) on its plans to build two 1,117-megawatt nuclear electric-generating units at the site of the V.C. Summer Nuclear Station, near Jenkinsville, S.C.
The ruling followed a nearly three-week-long public hearing in December 2008 regarding SCE&G’s combined application for a Certificate of Environmental Compatibility, Public Convenience and Necessity, and for a Base Load Review Order.
“This Commission’s approval of this project represents a key milestone in our efforts to meet South Carolina’s growing need for clean, reliable energy,” said SCE&G President and COO Kevin Marsh. “We’re pleased the Commission concluded that our plans to build two new nuclear units to meet that need are prudent.”
SCE&G and Santee Cooper, a state-owned electric and water utility in South Carolina, will be joint owners and share operating costs and generating output of the new units, with SCE&G accounting for 55 percent of the cost and output and Santee Cooper the remaining 45 percent. SCE&G will operate the plants. The companies, which also co-own the existing 966-megawatt V.C. Summer plant, plan to bring the first new unit on line in 2016, the second in 2019. Total projected cost to build the two units is $9.8 billion; SCE&G’s share of that total is $5.4 billion.
The project is still subject to approval by the Nuclear Regulatory Commission. The companies submitted an application with the NRC in March 2008 for a combined construction and operating license. Following a multi-year review process, the NRC could issue the combined license in 2011. The new units will be designed and built by Westinghouse Electric Company, LLC, and a subsidiary of The Shaw Group Inc., Stone & Webster, Inc.
The application approved today by the PSC was filed under provisions of the Base Load Review Act (BLRA), a state law enacted in 2007 to add structure and consistency to the process SCE&G and other regulated utilities must follow when building nuclear power plants. The BLRA allows for annual adjustments to rates during construction of the units as a means of recovering financing costs associated with the project.
Marsh said paying financing costs while construction is ongoing, as opposed to waiting until the project has been completed, lowers the cost of building the new units by about $1 billion, which in turn reduces the amount customers will have to pay through rates for such things as the cost of capital, depreciation, property taxes and insurance associated with the project. “We estimate this will save our customers at least $4 billion in electric rates over the life of the new units,” he said.
Based on the application approved today by the Commission, SCE&G projects customers will see an average rate increase of about 2.5 percent per year during construction of the units, beginning with an overall 0.4 percent increase effective at the end of March 2009.
South Carolina Electric & Gas Company is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 650,000 customers in 26 counties in the central, southern and southwestern portions of South Carolina. The company also provides natural gas service to approximately 307,000 customers in 34 counties in the state.
SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. Information about SCANA and its businesses is available on the Company’s web site at www.scana.com.
SAFE HARBOR STATEMENT – SCANA CORPORATION
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